Thought of the day: gas prices at “historic lows”

by Horatio Bunce

As Tennessee Republicans continue to float the idea of an increase in the motor fuel tax, I keep seeing a phrase along the lines of “it might be the right time since gas prices are at historic lows”.

I am not sure how “historic” or “low” they mean. Regular unleaded gasoline in Knoxville was $1.46/gallon when Barry Sotero was elected in 2008. Today it is $1.58/gallon, an 8.2% increase. If the fraudulent 2.1% inflation rate reported by our government actually included housing, food and fuels, then a 2.1% inflation rate since 2008 should put gasoline at $1.69/gallon where it has been in the last month. However, we all knew the days of $110/bbl oil and $3.50/gallon gasoline in this same window. And why should we believe there will not be an equal, non-market fundamental, skyrocketing of price in the next 7 years?

How much tax is enough? Of the current $1.58/gallon, $0.214 is state tax and another $0.184 is federal tax. That’s over 25% of the total revenue going to taxes already. The same government that has coddled hybrids and electric cars, their buyers and manufacturers, and mandated increased fuel efficiencies now seems to be suffering the consequences of its own mandates. What did they expect after forcing manufacture of more fuel efficient vehicles? More fuel use to keep padding their coffers?

Of course it is readily apparent to anyone paying attention the last seven years that fuel price apparently has nearly nothing to do with cost of oil production or even demand. Crude Oil price per barrel today ($37) is far less now than when gasoline was $1.46 per gallon ($46). Have you noticed the price of motor oil dropping 50% like gasoline has the last couple of years? Why hasn’t it moved? Are we to believe there is less demand and an inventory surplus of crude oil lowering the price of gasoline, but the same surplus doesn’t affect price for the oil used in the gasoline engine?

There are many games being played with the oil market, our OPEC agreement for exports only in US dollars, EFT (electronically traded funds) or futures (not actual barrels of oil) trading, economic sanctions (economic warfare) with certain foreign countries. Retaliation by other countries in response, etc. It is a false market. Republicans should stop relying on its instantaneous position to justify tax increases.

One thought on “Thought of the day: gas prices at “historic lows”

Leave a Reply

Your email address will not be published. Required fields are marked *