Speculators and the unrest in the Middle East continue to drive gas prices in the United States. We talked to Don Good from the Good Oil Company about the current gas price situation.
“You’d think we’d be losing some steam on this,” said Good. “It’s pretty much speculation that is driving prices. The good news is unemployment is down and the bad news is, the economy is going to heat up, petroleum is going to go up, use is going to go up so that’ll probably keep it from going down too much. As long as the Middle East is in turmoil, there’s more support there. I’m going to guess that we should see it leveling off very soon, but to be honest with you, I never thought we’d get to four dollars either.”
Good explains the difference in gas prices around the nation.
“We’ve got a lot of different types of gasoline. Take California, they’re in the mid-fours right now because they have a reformulated gasoline that has to do with the ozone so that gasoline is more. There is also a wide variation of taxes on it. If you consider it, sales tax, which is percentage based on gasoline, is about twenty-five to twenty-six cents a gallon. That’s what you’re paying in sales tax right now because of the higher prices. Indiana has eighteen cents and the federal government has eighteen cents. In Indiana, we’re look at fifty-three to fifty-five cents a gallon. A lot of states don’t have that kind of tax structure.”
Don Good says some countries are now looking to cut back production of gasoline.
“They were just announcing the other day that Saudi Arabia and some of these countries are looking to cut back production because they’re actually producing a glut of crude oil in the market so if that uncertainty holds and we could come out of it, it would drop rather drastically. That’s what we saw a couple of years ago when the economy started melting down. All that hot air from the speculative markets came out and it dropped overnight at about a dollar a gallon.”
If you think the prices are bad now, Good says the prices could get worse years down the line.
“Some of the experts are saying that we have the ability to produce 88 million barrels a day in the world. Right now, we’re using 85 million of the 88 million. It is projected within the next ten years, with China and India, that we’ll need 95 million. It’s going to make us 7 million barrels a day short. We see these prices now when we’re in a glut, you can imagine what we’re going to see then. Our government really needs to come up with a comprehensive energy package or we’re going to continue to these types of problems. I don’t think we’re going to get better, we’re going to get worse.”