At Least Fuel Prices Are Plunging, Too
October 15, 2008
By Bill Visnic
Auto industry stocks have taken a beating in the past month, but there's some consolation: so have gasoline prices.
The Energy Information Agency said this week the price of gasoline plummeted more than 30 cents, to an average of $3.15. Less than a month ago, the national average price for regular unleaded was $3.85.
This week's average is nearly a dollar less than mid-summer highs of $4-plus per gallon. In many areas of the country, the price for regular unleaded gasoline dipped to less than $3 per gallon.
Diesel fuel also dove deeply from highs of more than $5 per gallon this summer. The EIA said the national average price for diesel fuel this week was $3.65. The price represents a drop of more than a dollar from mid-July, when the national average price per gallon for diesel fuel was $4.76. It is the cheapest diesel has been since March.
News agencies reported analysts as saying prices may continue to drop through the fall and early winter, but many believe -- as do consumers -- the latest price dip will be transitory. The price drop does appear to be driven by a classic macroeconomic maxim: reduced demand creating a lower price. American drivers have markedly cut back gasoline consumption in the wake of this year's record prices, driving less and gravitating to more fuel-efficient new-vehicle purchases.
But it is unlikely automakers will tear up new battle strategies that make fuel-efficiency a watchword. Many automaker executives have said they are convinced high energy prices are here to stay -- and they have begun to initiate massive "structural" changes for their product-planning and manufacturing operations to develop and produce vehicles to address what they say is likely to be a permanent and global trend to higher fuel prices.
Posted by Bill Visnic at 3:30 AM under Business , Companies , News | Comments (2) | digg this | Seed Newsvine
Quite so. It was the rise of gasoline prices to the $3.00 mark in the wake of Katrina that started the new American era of fuel efficiency in the first place. The prices would have to go significantly below $3.00 -- and stay there for a while -- before people started changing their attitudes, I think.
Posted by: jkp1187 | October 15, 2008 at 4:50 AM
The best way to keep energy prices moving down is to keep doing what we've been doing:
Downsizing/upgrading the family fleet, carpooling, consolidating errands and all that other common sense stuff. If we could go to a ten hour, four day work week where possible, that would put a huge dent in oil imports.
Let's not fool ourselves into thinking that this has just been a a temporary spike upward in the price of oil. Rather, let's view the current trend as a temporary spike downward.
Posted by: fulcrumb | October 17, 2008 at 11:02 PM