Gas prices dropping soon?

[victory-rc]

Gas was $1.97 just a year ago, and anxiously awaiting for the United States to get back into production of all our natural resources again.

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[Cav427]

The US alone looks to be at about a 1 million bpd deficit. It’s just a matter of time now. Next the talk is going to shift to shortages of diesel especially in Europe but will trickle to the rest of the world.

$6.00+ summertime National average seems pretty likely. Diesel should be $8.00+ but rationing could make that number $10+

Don't think we will need to worry too much about rationing, the higher prices have cut back a bit on demand.

Also, many of us have modded our cars and get lower gas mileage, however many of us assumed gas prices would remain low.

Also e85 and other ethanol fuels cost less, why? Politics, government subsidies on ethanol production.

 

[ctandc72]

Also e85 and other ethanol fuels cost less, why? Politics, government subsidies on ethanol production.

Ironically, if the ethanol subsidies were stopped - even temporarily - the cost of gas would go down....more than most people think.

 

[sk47]

Hello; It has not happened yet, but I do hear proposals for the government to pass out gas cards. The details will matter whatever they turn out to be but that is not the bottom line of the idea. It will be another inflation feedback loop.
To pass out such cards to millions of car owners will require funding which will be more deficit spending. Such spending will very likely be in the hundreds of billions if not in the trillions. This will further devalue the dollar and lead to more inflation.

I get that some only consider supply and demand as inflationary but there can be policy events which affect supply and demand. The recent stimulus checks, extra unemployment payments and other such pandemic spending policies created a lot of demand by putting extra money in people's pockets.
At the same time policies also affected supply. Lots of people out of work with business shut down. With the production portion of the economy restricted the supply of goods was reduced as a result of policy. A reduction of supply at the same time many had more income than ever before.
I use an in-law who was drawing a lot more during the shutdowns that she had been making when she actually worked. There she was with money to spend beyond the normal and fewer things to spend it on. May I add lots of free time as she was not going to work.
I imagine by now we all have heard stories of how stimulus money was spent by people. That is a topic for another post or few.

Currently I have cut back on some of my driving due to high fuel prices. Mostly i try to combine trips and have more days when i do not drive at all. I imagine many will be doing similar things to cope with higher fuel prices. (Note - I get there are some on this forum who scoff at the cost and dismiss the higher fuel prices. Good for you to be so well heeled.)
If the gas card thing happens it will do at least two things. One is it will be like spending someone else's money and conservation of fuel will be less thus creating more demand. With more demand for a limited supply the cost will either stay up and may well increase further.
My guess is the gas cards if enacted will last until next December before the program stops. At the end of the program we will very likely have even higher fuel prices and will then be footing the bill with our own money.

There is obliviously more to this but i will stop.

 

[sk47]

Ironically, if the ethanol subsidies were stopped - even temporarily - the cost of gas would go down....more than most people think.

Hello; Yes to this. The corn ethanol program has been around long enough for the details to be known. I do not recall the exact figures any more but will make up an example. The idea was to supplement the total fuel supply. What i have read in the past decades is to get ten gallons of ethanol by distillation of corn than close to eight or nine gallons of petroleum fuel is used, mostly diesel.

Ethanol is higher octane to be sure but has less energy density than gasoline. A gallon of ethanol less energy than a gallon of gasoline is my understanding. You can run a higher compression due to the octane rating so get more power, but it takes more gallons is my understanding.

 

[lacanteen]

Paid $50 for 10.6 gallons of premium last night. ($4.84)

On the other hand, I'm grateful that my work vehicle is company provided.

 

[Bikeman315]

Paid $50 for 10.6 gallons of premium last night. ($4.84)

On the other hand, I'm grateful that my work vehicle is company provided.

Well it was fun while it lasted. Back up $0.05.

 

[sk47]

Hello; Regular was up three cents locally yesterday.

 

[ctandc72]

Hello; Yes to this. The corn ethanol program has been around long enough for the details to be known. I do not recall the exact figures any more but will make up an example. The idea was to supplement the total fuel supply. What i have read in the past decades is to get ten gallons of ethanol by distillation of corn than close to eight or nine gallons of petroleum fuel is used, mostly diesel.

Ethanol is higher octane to be sure but has less energy density than gasoline. A gallon of ethanol less energy than a gallon of gasoline is my understanding. You can run a higher compression due to the octane rating so get more power, but it takes more gallons is my understanding.

That's true, but that's not even the entire story. ENVIRONMENTALISTS recently released a long term study on U.S. Ethanol production. BECAUSE it became profitable (govt subsidies) to plant corn for ethanol production with farmers, these farmers CLEARED more land to plant said corn. Their DATA showed them that the U.S. Ethanol program has actually caused MORE carbon emissions in the climate because of the elimination of woodlands (natural carbon sinks).

Ironic huh?

Other, arguably more important (at least in the next 20-30 years) is the fact that more farmers growing more corn for ethanol mean less farmers growing corn or other grains for livestock feed, human consumption, export etc.

Look at the commodities market right now. Look at the price of corn and wheat - just two examples. Then check the price of potash and other fertilizer ingredients. The increase in food prices is here. It hasn't hit full force yet - remember these are FUTURE prices - but the price increase of the things needed to plant grains (fuel, fertilizer etc etc) has already resulted in a net DECREASE in grain planting per acre in the U.S. - which means less production later this year.

The increase in fuel prices increases the cost of almost EVERY consumer good we know take for granted.

I won't even dip my toe into the ridiculously deep waters of supply chain shortages that are getting worse, not better....

 

[Bikeman315]

That's true, but that's not even the entire story. ENVIRONMENTALISTS recently released a long term study on U.S. Ethanol production. BECAUSE it became profitable (govt subsidies) to plant corn for ethanol production with farmers, these farmers CLEARED more land to plant said corn. Their DATA showed them that the U.S. Ethanol program has actually caused MORE carbon emissions in the climate because of the elimination of woodlands (natural carbon sinks).

Ironic huh?

Other, arguably more important (at least in the next 20-30 years) is the fact that more farmers growing more corn for ethanol mean less farmers growing corn or other grains for livestock feed, human consumption, export etc.

Look at the commodities market right now. Look at the price of corn and wheat - just two examples. Then check the price of potash and other fertilizer ingredients. The increase in food prices is here. It hasn't hit full force yet - remember these are FUTURE prices - but the price increase of the things needed to plant grains (fuel, fertilizer etc etc) has already resulted in a net DECREASE in grain planting per acre in the U.S. - which means less production later this year.

The increase in fuel prices increases the cost of almost EVERY consumer good we know take for granted.

I won't even dip my toe into the ridiculously deep waters of supply chain shortages that are getting worse, not better....

Hmmmmm.

https://growthenergy.org/faq/ethanol-receive-federal-government-subsidies/

https://www.agriculturefairnessalliance.org/news/corn/

 

[sk47]

Hmmmmm.

https://growthenergy.org/faq/ethanol-receive-federal-government-subsidies/

https://www.agriculturefairnessalliance.org/news/corn/

Hello; I am guessing you have a point in posting the links. The first states corn ethanol for fuel does not get subsidies. I do not recall anyone stating that they do. The use of a food crop, corn, as a fuel has issues as has been mentioned. Subsidies not being among them.

second link about corn production for food is part of the government subsidies for agriculture is true although I do not know the details. Whether or not the government should subsidize food production is a worthy topic. A topic far from the discussion on fuel prices.

That you attached the links to a post by ctandc72 is a puzzle. What is your point?

 

[Bikeman315]

Hello; I am guessing you have a point in posting the links. The first states corn ethanol for fuel does not get subsidies. I do not recall anyone stating that they do. The use of a food crop, corn, as a fuel has issues as has been mentioned. Subsidies not being among them.

second link about corn production for food is part of the government subsidies for agriculture is true although I do not know the details. Whether or not the government should subsidize food production is a worthy topic. A topic far from the discussion on fuel prices.

That you attached the links to a post by ctandc72 is a puzzle. What is your point?

Nothing really, I just thought they were interesting. Just added because of the talk about ethanol.

 

[Rapid Red]

Yeah, they might drop in 4 years. But stupid does as stupid is, so don't count the chickens before they hatch...

Cali, saying 400 beans gas price relief payments for Cali car owners. Now ain't that so appropriate for that state.

Spend the taxpayer's money, throwing it in the street. Then they will turn right around and raise taxes to cover costs.

Stupid is as stupid does......poster state.

 

[ctandc72]

Hmmmmm.

https://growthenergy.org/faq/ethanol-receive-federal-government-subsidies/

https://www.agriculturefairnessalliance.org/news/corn/

The Ethanol link is a dodge...

Look up "Volumetric Ethanol Excise Tax Credit "

Then look up how much of U.S. corn commodities / futures are purchased by China.

 

[compprep]

What is was yr my dad was born!! $.12

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