Tuesday, March 18, 2008

$5/Gallon Gas Is Officially Here

Filling up in the town of Gorda in Big Sur will cost you $5.20 a gallon-- for regular unleaded. Premium is $5.40.

Writing in the San Francisco Chronicle, David Baker argues that the skyrocketing price of gas has more to do with the falling value of the dollar than with supply and demand:

"Oil is traded in dollars. A weak dollar means that foreign investors can buy more oil, which helps drive up the price. And huge institutional investors start buying oil as a safe place to put their money, safer than the dollar or the stock market. "

The argument has some validity to be sure but it ignores some California-specific factors like lack of adequate refining capacity and the seasonal switches to different gasoline blends.

While anything you can do to cut back on gasoline consumption makes sense, this option might be just a little out of reach for a lot of us: Silicon Valley start-up Tesla Motors announced that it has begun regular production of its two seat, zero-emssion, electric roadster. It will cost you a cool $100,000 (which equates to 19,230 gallons of gas in Gorda, CA).

Blame the dollar for high gas prices [San Francisco Chronicle]