Skip to main content

HIGH GAS PRICES TO CONTINUE?

Just like a few other governments, the US (through its congress), is pushing for the wider usage of bio fuels. As reported by ABC News, such a scenario, coupled with the development of fuel efficient automobiles are making oil executives withhold plans to expand their existing refineries. If that happens, high pump prices of gasoline is expected to be the future scenario.

At the moment, there is an existing shortage of oil refineries in the US. In addition, demand for gas products is expected to increase. However, President Bush's call to reduce the demand by 20% though the wider use of bio fuels and development of energy efficient automobiles is making the oil industry rethink its expansion plans.
"Asked recently whether Chevron Corp. might build a new refinery, vice chairman Peter Robertson replied, "Why would I invest in a refinery when you're trying to make 20 percent of the gasoline supply ethanol?"
The ABC news report included various opinions regarding this issue. One thing is clear, most people agree that gas prices are very high at this point. If this continues, maybe it is time to ask; "Is this a case of market failure?"

Should the government intervene to remedy this problem? By the way, this problem is not unique to the United States.
Labels:

Comments

Post a Comment

Popular posts from this blog

Land Reform: Land of Bondage Land of the Free

One of the most moving speeches that I've read. During grade school, this was the most often recited elocution piece in my school. Here it is, the text of Raul Manglapus' Land of Bondage, Land of the Free. Land of Bondage, Land of the Free By Raul Manglapus And yet, ladies and gentlemen, the tao is constitutionally free! No wonder, then, that the tao being a slave has acquired the habits of a slave. No wonder that after three centuries in chains, without freedom, without hope, he should lose the erect and fearless posture of a freeman, and become the bent, misshapen, indolent, vicious, pitiful thing that he is! Who dares accuse him now? Who dares rise up in judgement against this man, reduced to this subhuman level by three centuries of oppession? Ladies and gentlemen the tao does not come here tonight to be judged -- but to judge! Hear then his accusation and his sentence: I indict the Spanish encomendero for inventing taxes impossible to pay! I indict the usurer for s...
35 comments
Read more

US PRESIDENTIAL CONVOYS

A columnist for a Philippine newspaper talks about the costs and massive preparations required by the US Secret Service whenever President Bush and other (US Presidents) travel outside of Washington DC. I remember watching a CNN report that showed how big a US presidential convoy is, compared to the two vehicle transport being used by Prime Minister Tony Blair of the UK.
10 comments
Read more

How's the Philippine Economy?

The papers report the following: Mutual Funds are UP: First Metro leads the pack with a yield of 18% (year-to-date)with the others, not too far behind. It simply means that an investment made at the start of the year would have already earned 18% of its original value, by now. The Philippine currency is UP: The peso is close to breaking below PhP 48 to a dollar. The Stock Market index is close to attaining an all time (Pre Asian Crisis level). What does it actually say? The continued success of the country's Mutual Funds will most probably lure more foreign (short term investments) into the country. With the american mutual funds market hitting an average of only 10% for the entire 2006, more hot money can be expected to come in. If this momentum continues, coupled with a sustained increase in OFW (overseas foreign workers) remittances, and the absence of a sharply negative occurence in all the other sectors of the economy, the US dollar will most likely continue to decline. D...
4 comments
Read more