The world moves quickly these days. Since the New Year, oil has risen by more than $7 per barrel and currently is in sight of the all-time high of $70 a barrel. Cold weather in Eastern Europe and threats of supply disruptions from Nigeria and Iran are raising the possibility of an economy-threatening spike in oil prices later this year.
How high would oil prices have to go to before serious economic consequences begin? From our experience in 2005, we know $3 a gallon gasoline won't do it. Gasoline consumption in the US actually increased a bit during the past year despite much higher prices and numerous lengthy supply interruptions caused by the various hurricanes.
Each of us has a personal gas price at which we start to curtail our non-essential driving and a higher price at which our non-emergency driving comes to close to stopping. Most of us have no idea just where these prices might be for we have never had to think about the issue before. Gasoline has always been so cheap, few have had to worry.
There are, of course, numerous variables that would go into a drive/no drive decision: the fuel efficiency of your vehicle, the length and frequency of your trips, the importance to you of your trips, how much disposable income or credit you have, and can you pass some or all of the fuel cost on to somebody else.
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The world moves quickly these days. Since the New Year, oil has risen by more than $7 per barrel and currently is in sight of the all-time high of $70 a barrel. Cold weather in Eastern Europe and threats of supply disruptions from Nigeria and Iran are raising the possibility of an economy-threatening spike in oil prices later this year.
