From the desk Sept. 13, 2011
This morning, one of the worst things that can happen to a college student happened to me — my gas gauge read “E.”
Fifty-two dollars and sixty-eight cents later, I can now breath easy — for the next two weeks until I’m out again.
The average price of gas in the United States last July was $3.65, according to the Bureau of Labor Statistics. That is $2.17 more than the average price of gas during July of 2001.
Rumors have circulated that it was because of the attacks of Sept. 11, 2001 that our gas prices began to rapidly climb. However, looking at the statistical evidence proves just the opposite.
According to the Bureau of Labor Statistics, gas prices dropped after the attacks in 2001. They did not begin to slowly rise again until 2004, when, in May, the national average for the first time in American History broke $2 at $2.01 per gallon.
According to many in the media, including Ezra Klein of The Washington Post, the rise in gas prices has been almost solely due to the rise in the cost of crude oil.
For all of you who are as ignorant as me when it comes to gas terminology, crude oil is, “a naturally occurring liquid composed mostly of hydrogen and carbon. It is usually found underground but can also be found above ground in oil seeps or tar pits,” according to the Alaska state webpage.
Now, because I am not a savvy gas expert, I began to wonder why the prices of this crude oil were so high. If the world is not running low on the substance, than why are inflation rates so high?
Well, according to Klein in his article entitled, “Why are gas prices rising? And how much do voters care?” It is likely because of the price gauging happening in Libya. However, he also argued that the price increase on their end is not substantial enough to cause the dramatic prices we are seeing here.
Because financial advisors and institutions do the buying and selling of crude oil, it is easy for the prices to continually rise without taking into account what is actually being bought and sold, something that, according to Klein, the Obama administration has full power to regulate.
I believe there is much truth in Klein’s closing statement, “Gasoline is one of those ‘frequently purchased items,’ and high gas prices can trick consumers into thinking that inflation is higher, and thus the economy is worse, than it really is. That’s bad news for the Obama administration.”
Hopefully, what this means for us hungry, busy and broke college students is that the closer we get to the 2012 elections, the lower the price of gas will become.