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Saturday, May 7, 2011
Will Prices at the Pump Decline With the Fall in the Price of Crude?
The price of gas at the pump has risen lately. In fact, it has skyrocketed in the last year or so. To some extent, this is reasonable and to be expected. The world economies have strengthened considerably over that same period of time. This growth has been been evidenced by the increased demand in crude oil, a source of energy that powers many aspects of the global economy. That natural demand, coupled with the rapid decline in the value of the US dollar due to the easy money policies of the US Federal Reserve, lead us to the high price of crude oil which is where we now stand. So, although it hurts every time we all fill up our gas tanks, at least it makes some sense as to why the gas prices have shot up.
Photo Courtesy incrediblemiracles.com
However, over the last week, the price of crude oil has plummeted, from $114.83 to $94.63. That's a decrease of 17.59%. So, if the price of gas at the pump really is so closely linked to the price of crude oil as so many fraudulent gas station owners have led people to believe, we would assume that the price of gas should drop that same 17 or 18%, right? That would mean that the national average of about $4/gallon would drop to $3.29 in the coming days, if what we're being told is really true. If you think that's going to happen, at least at the same pace that the price of gas gone up, you're only kidding yourself.
Photo By Gasbuddy.com
The state attorneys general are supposed to be the authority regulating this type of issue. But, as any average American would tell you, somebody is evidently not doing their job. If we want the US economy to continue to grow and stay on track from the depths of the recession, price gouging the cost of a product that nearly everyone uses on a daily basis could be extremely detrimental.