Running on Fumes

Posted on April 13, 2005
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With gas prices inching ever northward and warm summer air hinting at the busy forthcoming driving season, what's a motorist to do?

First, it would be useful to realize that our record-high gas prices are really not at record highs. However much anger we may feel at the gas pump, when we account for inflation, gas prices are not nearly as high as they were for an extended period during the late 1970s. However many dollars we shell out, a dollar now is not worth as much as it was in the past, and thus we pay relatively less now in real terms.

Second, for the Phoenix area anyway, a federally required summer blend, which costs more to produce, will bring our mid-year averages generally higher than the rest of the nation. Fortunately, Governor Napolitano has acknowledged this and has taken on the commendable task of getting the feds to lift that restriction, if only for this year. It's not clear how this will affect prices, since oil is bought and sold in a global market that accounts for information far into the future - changes for this summer may be too late to change the future contracts many oil companies have already procured.

But the spirit is correct. As Mark Brnovich pointed out in an opinion piece last year, this is one of three steps policymakers can take to relieve gas prices. Moreover, removing regulatory burdens will do more for consumers than adding them, as attorney general Terry Goddard promised to do when he swore to take on price gougers.

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