It’s something many of us thought we’d never see again: gas prices at the $2 or below level. And yet it is happening: even here in rural Mississippi, there have been a number of locations around the state with $1.99.9 pump prices or lower.
Barring upheaval in the Mideast, or a change in OPEC policy, or an interruption in critical U.S. refinery operations, analysts say a fill-up will likely get even cheaper until the spring/summer driving season boosts demand and pushes up prices.
While Joe Motorist rejoices at the dollars saved, the impact of nose-diving oil prices is seen as a boon, a curse, or an opportunity, depending on how one’s fortunes are linked to the commodity.
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Those in the oil business and all its allied industries are obviously unhappy at the diminished revenue stream. Mighty Russia’s economy, muchly dependent on its oil sales, has taken a big hit, and other major oil-producing countries have seen sharp declines in oil revenues. The bigger story is, apparently, that OPEC is trying to use lower prices to make a lot of drilling — particularly in the U.S. — so unprofitable that it will grind to a halt and then prices can be pushed higher again.
The U.S., through advancements in exploration and drilling technology, has become the world’s leading oil producer — but that achievement comes at a price, because extracting the oil is so expensive that it is profitable only when oil prices are high. Low prices, industry leaders fret, may lead to cutbacks and big job losses.
Investors and speculators, who’ve profited from high oil prices and the volatility in the markets, are abandoning oil in droves, and the ripples have caused setbacks in major stock market indices worldwide.
High pump prices were causing a major shift in America’s vehicle manufacturing and purchase, with companies building more compact, more fuel-efficient cars and trucks. With low gas prices, reports are that sales of big SUVs and big pickups are seeing a significant jump.
There are worries that there will also be a relaxation of the mandate for more fuel-efficient vehicles, and that there will be more CO2 clogging the atmosphere. If oil prices stay low, it could slow the progress in biofuels development even more.
In the meantime, the nation’s roads and bridges continue to deteriorate, victim to decades of woefully inadequate funding for repair and replacement. The federal Highway Trust Fund, which got an emergency transfusion earlier this year, is projected to be solvent only through May 2015.
The 18.4-cent federal gas tax, the trust fund’s primary money source, hasn’t changed in 20 years, and some in Washington see the current dip in gas prices as an opportunity to push for an increase. Sen. Bob Corker, R-Tenn., is one — he has suggested gradually raising the tax by 12 cents over two years.
But who knows what the mood of the new Congress will be toward any kind of tax increase, however desperate the need for major attention to the nation’s crumbling infrastructure?
Chances are, it’ll be another kicking of the can down the road.