Pricey Petro Prices Don't Deter Drivers

That's the only conclusion you could draw from this AP article.
High gasoline prices may dent economic growth, but consumers' fuel appetite is still strong. Those trends are likely to persist, experts said, as average nationwide pump prices approach $3 a gallon a threshold once feared to be disastrous for motorists and potentially the economy. Citigroup Smith Barney senior economist Steven Wieting said the conventional wisdom that $3-a-gallon was some kind of tipping point "has been largely overstated."
The reality is that America is a nation with a passionate love affair for driving. That hasn't changed anytime since I started driving in 1972. The only time we didn't drive as many miles as we used to was the price control days of the Nixon Administration and the price-capping days of the Carter Administration. That's because we had gas rationing. In other words, it was a government-mandated driving reduction.

Oil consumption will drop when the world's economy slows down and not a minute sooner. I've said for a very long time that the economic growth in India and China had far more to do with oil prices than did Bush's supposed coziness with oil companies. This article says that I've been proven right:
While gasoline demand is not expected to collapse, oil analysts caution that weakening economic growth could temper soaring energy prices over time. "It's kind of a slower, more lagging impact," said Antoine Halff, director of global energy at Fimat USA in New York.
Finally, this lifestyle choice is noteworthy:
Wachovia Corp. economist Jason Schenker said motorists cannot instantly change their lifestyles, the type of vehicle they drive, the distance they drive to work, and so "consumption is essentially fixed. Even now, SUVs and light trucks are among the majority of vehicles sold," he said.
There's a political side to this article: Gas prices won't be a dominant issue in this fall's election. People won't like the high gas prices but I think it's something that they've already adjusted to for the most part.


Posted Wednesday, July 12, 2006 9:42 PM

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