Fuel Prices And New Cars

Gas Pumps
Photo Source: Stock.xching

Last year some of us were paying over $4.00 per gallon for gasoline. Home heating oil, for those that heat with it, cost far more and diesel fuel even more. It always amazed me that the cost of something like diesel fuel, which is far less costly to refine, would be selling for more than gasoline. The same is true for home heating oil which is also less refined. It doesn't take a genius to figure this out. All the cross country trucks run on diesel fuel. Oh they could also run on home heating oil, but that has been outlawed. To keep track of that and make sure that the truckers are not saving money, a dye is put into home heating oil so that police and inspectors can determine if a truck is using it. Oh we certainly wouldn't want these guy to save money and lower the cost of transportation, would we? You have to wonder why nothing was ever done to prevent this situation, which is clearly usury? One has to wonder what kind of government would allow such a rip off.

Some might say," but look how cheap gas is today", it is under $3.00 per gallon. First of all that is not cheap, we have been brainwashed into believing that. There is a reason that gasoline is much cheaper this year and that reason rests with the auto industry. The oil companies know that when gasoline goes up to around $4.00 per gallon or higher, that people start buying hybrid cars. Hybrid cars are just beginning to get their foot in the door and electrics are not far behind. The oil companies also know that there is a certain price range that gasoline can sell for, where people would rather own a more comfortable larger car and are not worried about paying for gasoline. Believe me when I tell you that the oil companies have all sorts of statistics about things like this. Remember that they are swimming in cash and can afford to hire anyone they need. Big oil wants to keep the hybrids and electrics off the road and their greatest prize would be if so few of us buy them that they fail.

Hybrid Car Being Tested At NASA
Photo Source; NASA

Here is the thing, hybrids and electrics have other virtues besides being economical. They make some people feel good about themselves. They feel that they are doing their bit to save the planet. Are there enough of these people to make a particular hybrid, or electric car successful? Probably not is the unfortunate answer. As more different brands of hybrids get on the market, they could divide up the existing customer base, if the price for gas remains under the $3.00 mark, or near it. What effect will all electric cars have on the market? With electric cars, range is one of the most important considerations. If a car only has a range of 50, or even 100 miles, it certainly limits the usefulness of the car. This type of car might be good for a city car, that is only used to got around locally, but would certainly be a pain on trips. How would you like to have to stop every 100 miles or so and look for a place to plug into and then wait until the car was charged and what would you be charged, excuse the pun?

One factor that no one seems to mention much, is the cost of electricity. This cost varies all over our country. For those of us that live in the North East, charging a car all night might be a very expensive proposition. While it might not cost us the same as gasoline, it might be high enough for us to say, hey this isn't worth the trouble and giving up the type of cars we like. This could even be a talking point with big oil. We might even see ads put out that seem to indicate that the savings from electric cars are no where as much as we were led to believe. Another factor is that some auto companies are not farsighted enough. I am beginning to think that the Chevrolet division of General Motors is one of them. We have been hearing about the Chevy Volt for years. I have read articles that indicate that the battery pack has been redesigned several time. Now I have just heard an announcement that the Volt will get 230 miles per gallon, using a new federal formula. It only goes 40 miles before the gasoline engine takes over. The Volt uses the gasoline engine not to power the wheels, but to make electricity for the car to run on. Amid all this, Japanese companies are announcing cars that will get over 300 miles per gallon.

You would have thought that GM would have left the power source open ended so that they could have taken advantage of new developments in batteries, such as the recently announced all liquid battery that has a far greater range than any other battery out there right now. One thing that always hurt General Motors was that they were slow to change and slow to bring out new developments and the way the Volt is going, it certainly is not breaking any speed records for development. If General Motors really wanted to be competitive in electric cars, it would be better off buying out Tesla Motors. That company has an electric car that supposedly has a range of over 300 miles between charges and seats seven people. If the Tesla was mass produced in sufficient numbers, that would drive the price down, which now is about the same as the Volt is slated to be.

The oil companies know that their days of monopoly are limited and I am sure that they are making other plans right now as I write this article. They have the cash to get into what ever that want. The big question is what will they ruin next? One of the key areas that big oil is investing in is alternative fuel. Although we don't hear much about it, oil is investing in things like turning algae into fuel. While a lot of people think that this is a wonderful thing, they seem to forget what happened when these same companies began to control all the oil. The oil companies will only invest in what they believe will return the most on their investment. This is true, because they are profit driven and we can't blame them for this. What we can blame them for is controlling prices. Imagine if they controlled food. There would never be any sales. When was the last time you saw a sign that said buy one gallon of gasoline and get a gallon free?

The oil companies have gone too far with the concept of making a profit at any cost. They have driven up prices for all of us in every area of the economy. We have to remember that trucks deliver most of the things that are placed on shelves in supermarkets and the price of fuel for those trucks is astronomical. It is one thing to benefit from having a product that people need, but it is a whole other thing to control all the companies selling that product. There are laws against this, laws that don't seem to ever get enforced. If anyone out there thinks that algae fuel will be any different, they have to think again. If that gets controlled exclusively by the same people that control our gas and oil prices, it will be the same game all over again.