Gasoline prices: How high will it go?

[Duds]

i'm really just having fun with you guys. Its funny how a post about gas prices can turn into all americans being arrogant and hybrid cars being ugly, etc.

Oh, well then, since you put it like that..

[jeskibuff]

I dont know what prompted your personal attack on me, i thought i had a right to my opinion. Guess you can dish it out but you cant take it.

Let's see here, your first post in this thread is a direct insult to Sir TtT's vehicle sense:

Many poeple dont have the funds to go out and purchase a hunk of junk hybrid vehicle

When Sir TtT responds in kind to your insult (appropriately, I might add, also based on your comment of "that's just giving in to these prices") you respond with:

i think you are a moron for buying one and you look like a dork driving it

Now that's a personal attack if I ever saw one!
Then you further irritate the matter by saying

it's safe to say i have more money in my pocket than if I went out and bought an ugly hybrid

Then as soon as there's a retaliatory comment you cry "Would you guys relax a little? I made a simple statement, and Terrence makes a personal attack on me"
Based on that little exchange, I would say that someone can dish it out but can't take it, but in this case that someone isn't Sir TtT!

Hey, you're not a real-life version of the character in Stephen King's "Dreamcatcher", are you "Duds"?

I'm having fun here in case you guys cant see my sarcasm.

Maybe if your comments weren't so pointed it would have been different, but they came across as pretty insulting from my perspective.

if you have a two seater then you can use the lane if you have a passenger. We just had a law here approved so that I can ride in that lane even If I didn't have a passenger with me.

That makes sense and sounds as if a good law was passed. I'm assuming that it means you can drive in the HOV alone if you're in a hybrid. Or does it apply to any car or motorcycle that gets over say, 50 MPG? You do realize this means you no longer have any (believable) excuse to keep your inflatable woman around, don't you?

The battery in the Insight is used to assist in acceleration, and to start the car from neutral. It doesn't run out(I have never seen it happen with me),

Oh, but it would eventually run out, as energy doesn't come out of thin air.

the battery is recharged when the car coasts, when braking, or in deceleration.

Yes, but some of that energy which brought the car up to cruising speed came from gasoline.

The battery actually helps the car use less fuel when accelerating, and charging doesn't use any extra gas whasoever.

I believe the Prius relies totally on electric power when accelerating from stop. Charging technically uses gas...it's just a process of recovering the energy that was used to get the car up to speed. If you don't believe it, then just let the fuel tank go empty. Eventually the batteries will go dead because the gas is needed to maintain the charge.

Dude, you've totally got to reply to one of us at a time

Whatsamatter, you can't keep up??

A percentage of the population like Sir T have adjusted, but not enough to make a difference, yet. In fact just the opposite...people apparently don't care about the price of gas and now we're seeing SUV's sales growing again.

I think many people have made adjustments and many are probably waiting to see what happens. People love the behemoths so it may take $4/gal to get them to change their minds, maybe more. Even if some wanted to get out of them, could they do so if the demand on the used market meant they couldn't get enough out of the sale to pay off their loans or perhaps would take a severe beating on a trade-in? From what I've seen, the sales incentives are on the SUVs which means the car companies are having greater difficulty moving them now.

a higher price means less demand or decreased supply

Sorry, but a higher price tends to follow greater demand for a product that's in limited supply

No need to apologize, you are only half right here...Price is set where demand and supply meet, two functions, not one exclusively.

Uh, it wasn't quite "an apology" and the words "tends to follow" takes into account those two components of the equation. One thing for certain though is that "a higher price" doesn't "mean less demand" in the supply-and-demand equation. This is just a matter of semantics as I believe you're saying that as a result of higher prices people will seek alternative options, eventually lessening demand. But then that weaker demand will eventually result in lowering of prices, won't it?

Fair is relative when your talking government programs. Health-care isn't so important to me at my age with my health...give me tax cuts or better highways. If I was 70 with cancer my opinion might change on how money should be spent.

Fairness is more absolute when you can put yourself in the shoes of that 70-year-old with cancer. Theoretically, you shouldn't have to "be there" to determine if that's fair or not.

But didn't you say earlier that there was a huge disparity in prices across Canada because of taxes?

Nope...might have been someone else. I don't know what prices are everywhere else...but tax levels outside of oil-bearing Alberta aren't radically different from region to region...they are different though, but the price of gas tends to be fairly similar.

Then who said this in post #30?

I did a bit more research on the Canadian tax levels...they vary by province...according to Esso (division of Exxon, www.esso.ca) 40-50% of the price at the pumps includes a direct gas tax...there's double and even triple taxing going on...On the east cost, some provinces have a gas surcharge of 8% (Harmonized Sales Tax) as well...Of the manufacturing costs reported, there's more surtcharges/taxes levied that the oil companies are having to pass on.

Good news is I can change in July.
We're a US company lots of Americans relocated here. Some of my peers are in the same boat some aren't. Things heat up in the summer when everyone decides which currency to choose. Knowing my luck I'll go 0 for 2.

Hey, I'll sell you my Magic 8 Ball for only $88 and that'll help you make the right choice! Consider it a meager investment for the windfall you'll make!!

First I wasn't attacking you personally. I was attacking a very arrogant american like thought process

Oh, those are some GREAT weasel words Sir TtT. You're not a lawyer by profession, are you?

Sure, Subarus have 4 wheel drive, could my dog fit in the back?

If he was a real dog, you could just tie him to the bumper like the Griswolds did in one of those National Lampoon "Vacation" movies!

[Duds]

I never said his hybrid was a hunk of junk. so no reason to call me arrogant, i'm the least arrogant person you will ever meet. whatever, like i said, i'm having fun...if you dont like me, dont respond to my posts

about the dog, that would be good exercise for him, but his hips arent so great...

[Sir Terrence the Terrible]

OK, so your thought process is that since i purchased an SUV for the fact that it has 4 wheel drive and has plenty of room for my Saint Bernard, I am an arrogant American?? wow, that's amazing...

Okay, Let me get this straight, you need a SUV for your dog and yourself? You are kidding right? Do you go off road? If not, then why do you need a 4 wheel drive? They do make 4 wheel drive cars that are much more fuel efficient than a SUV you know.

Sure, Subarus have 4 wheel drive, could my dog fit in the back? no way...

Right! I have a black lab that comfortably sits in the passenger seat of my ugly hybrid. He can also comfortably sit on the floor even when I have had passengers(my friends love my dog).

If the GMC trail blazer with the inline 6 was available when i bought my yukon, i most likely would have purchased one of those....and yes, the older blazers were available, but were much smaller, and being 6'3" i wouldnt not have been comfortable driving it....

My best friend who commutes with me to work is 6'4". He finds my ugly hybrid VERY comfortable.(he would not ride in it if otherwise) And you need a SUV. I am not saying that you shouldn't buy a SUV, what I am saying is that your choice is part of why gas prices are so high, and why you shouldn't ***** on bit about it.

Lastly, I am more about the issue which is much larger than how words are spelled. One of the most known online debate tricks is when you have nothing intelligent to offer to the discussion, then you insult the other persons spelling, or vocabulary. That is called spin, and this is a no spin zone.

[Woochifer]

Always an interesting flow of things whenever the gas prices spike. In inflation-adjusted terms, we're not even up to the peak prices that occurred in the early-80s (I believe that the national average would have to climb over $3 a gallon before we surpass the true all-time high). During that "shortage" and the one that occurred with the Arab embargo in the mid-70s, prices went back down due to two simple factors -- 1) Americans adjusted their behavior to minimize their budgetary burden (i.e. they switched to more fuel efficient cars, they took better care of the car that they already had, they drove less, they took public transportation, they carpooled, etc.) and 2) oil producers increased production. In each case, the price of gas plummeted once those two factors manifested themselves.

Gas prices on the rise is no shock, I'm just surprised that it did not happen sooner. From what I understand, oil producers have been increasing their rate of production to keep pace with demand. However, right now with the burgeoning economies in China and India, the demand is rising a lot faster than it had previously. With resources like oil, it does not take a huge increase in demand or decrease in production to cause an inordinately large increase in prices. The true "value" of a commodity is typically somewhere between the extremes. But, I think that the rise in global demand and how our overall vehicle fleet has moved away from fuel efficiency over the past 20 years means that high gas prices will likely be more the norm than the exception for the near future.

And on hybrids, we have only begun to see what they are capable of. Relegating them to the tree hugging crowd is pretty ignorant because hybrid technology not only increases fuel economy but it can also bring a dramatic increase in performance as well. I read a couple of years ago that Honda is developing a hybrid sports car (presumably the successor to the once-cutting-edge but now aging Acura NSX) that will not only deliver world beating performance (they're targeting 0 to 60 in less than four seconds), but get 30 MPG as well. Even now, the hybrid Accord is quicker and more responsive than the Accord V-6, yet has better fuel economy than the four-cylinder version. The first batch of hybrids might have been high efficiency curiosities, but now we're starting to see more hybrids that look and behave like normal cars. The only difference is the higher fuel economy and the quicker acceleration (and for now, the higher sticker price).

[Sir Terrence the Terrible]

That makes sense and sounds as if a good law was passed. I'm assuming that it means you can drive in the HOV alone if you're in a hybrid. Or does it apply to any car or motorcycle that gets over say, 50 MPG? You do realize this means you no longer have any (believable) excuse to keep your inflatable woman around, don't you?

It applies to cars that get 45mpg and over. Shhhhhhh man, the doll was supposed to be a secret! LOL, she still has nightime duties though (doh!!)

Oh, but it would eventually run out, as energy doesn't come out of thin air.

Eventually the battery will have to be changed out, but as long as you put on the brake or decelerate it will always charge back up after accelerating. I have never seen my display go below half on battery usage since I have owned the car(2 years)

Yes, but some of that energy which brought the car up to cruising speed came from gasoline.

That is correct, but not a much as the normal non hybrid car. That is why it gets such good mileage. Plus you need that battery as the engine is only a 1.3liter 3 cylinder engine. Not corvette fast, but it does have a nice zip because of its low weight and areodynamic shape.

I believe the Prius relies totally on electric power when accelerating from stop. Charging technically uses gas...it's just a process of recovering the energy that was used to get the car up to speed. If you don't believe it, then just let the fuel tank go empty. Eventually the batteries will go dead because the gas is needed to maintain the charge.

There is no way I am testing this hypothesis, I don't like pushing cars (LOL). But you are right, it does need gasoline to keep the charge. You can't brake or decelerate without actually moving.

Oh, those are some GREAT weasel words Sir TtT. You're not a lawyer by profession, are you?

A lawyer!!! Bite your tongue mister.. Since I don't know this dude, attacking him personally would be silly. However his thought process is VERY familar, and that is what I had a problem with.

[BRANDONH]

Apples and oranges. You're comparing a normally aspirated gas engine with a turbocharged diesel. Turbocharge the gas engine and measure the 0-60 time difference then! Even with turbocharging the diesel is still slower than the gas engine. Dieselforum.org's assertion that performance is better than gas must only pertain to fuel consumption, not road manners.

Yea, a turbo gas compared to turbo diesel is faster but will it get 50 mpg?
How about comparing horse power to horse power.
My diesel 90 hp the same car Gas 115 hp my car 1 second slower in the quarter.
Like I said todays diesels are no dogs.

[Geoffcin]

Gas priced will plummet when the global economy takes a nose dive. The American economy is poised to make such a dive, probably starting by next September after the feds are forced to close off the cheap $$$ supply to forestall raging inflation brought on by the dollars precipitous fall in value related to imports, and the full impact of higher energy costs impacting the economy.

[cam]

Since you have never seen me driving my car, I 'll just chalk up this statement to the lack of any grey matter between the ears. Thanks to my hybrid I have more money in my pocket that is not going to the middle east. Can you say the same, or does the lack of grey matter prevent you from making a intelligent answer.

Sir T, I totally respect your respect for our planet, but you say, thanks to your hybrid, you have more money in your pocket. Well that maybe true in one respect (not buying as much fuel) but there is no doubt you paid more money for you initial purchase. And if you keep that car for 7-8 years, the battery pack will need to be replaced for about 6-8 thousand dollars. There goes all the money you saved. And if you try to sell it at around the 7 year mark before the battery needs replacement, the resale price will be substanially lower, unless you unload it to some unsuspecting fool who thinks the battery last forever and or doesn't have a clue what it cost to replace.

[cam]

That's too bad, Cam...I did a bit more research on the Canadian tax levels...they vary by province...according to Esso (division of Exxon, www.esso.ca) 40-50% of the price at the pumps includes a direct gas tax...there's double and even triple taxing going on...On the east cost, some provinces have a gas surcharge of 8% (Harmonized Sales Tax) as well...Of the manufacturing costs reported, there's more surtcharges/taxes levied that the oil companies are having to pass on.

We're easily handy to 60-66% I read on the stickers at the pumps, I'm sure there's some hidden taxes there as well.
While I'm a bit pissed off we're being tax gouged, I'm no even more curious as to why the cost of gas back home in Atlanta is almost as much if tax rates are only 20-30%.

What's worse, the government (not just Canada) taxes the hell out of the record profits the oil companies are making - taking a cut of our savings.

I'm not one for consipiracies, and I certainly wouldn't consider myself a left-wing liberal, but I find it a bit suspicious that governments who makes zillions of the oil industry don't appear to be trying their hardest to eliminate any market inefficiencies to promote the best form of competition. They've got too much to gain standing pat.

105.9 a liter i guess was a deal because today it is now 107.9. Where I live I am 35 minutes out of Vancouver. We have an area which is called the GVRD (greater vancouver regional district) which streches from Vancouver to the Aldergrove/Abottsford border. Once you hit Abottsford, the taxes drop 8 cents a liter. The GVRD collects that extra 8 cents per liter to help fund Translink which is the name of our transit system. The money doesn't seem to be very effective because most people like myself can't use it because it would take me one bus then the skytrain and then another bus to get to work, about one hour, or I can take my four cylinder car 14 kilometers, about 20 minutes.

[kexodusc]

Then who said this in post #30?

Yeah, I wrote post #30...so? No where in there is "huge disparity" implied or mentioned...yes there's double and triple taxation going on in all provinces, yes there's an 8% harmonized sales tax for the east cost provinces...there are other surcharges in other jursisdictions. The lone exception is Alberta where the oil industry is (the 40% figure). The remainder are all around 50% (plus surcharges of varying amounts around 8%). The differences are hardly a huge disparity, but they're there as one would expect.

[Duds]

No Sir Terry, not the only reasons. I live in upstate NY, we get snow up here, 4WD is very helpful in snow....

Your black lab weighs how much? My Saint BErnard weighs 170 pounds and comes up to my hips. Like I said, i'm 6'3" so that should give you an idea of his height. HAving a dog sit on the floor in the back seat of a car is very dangerous as well...

To blame the cost of gas on SUV's is absurd. How long has the V-8 been around? A long time, they've been in pick up trucks for many many years now. Remember the old muscle car days? I seem to hear a lot about the big V-8's they had too...

I belive you started this mess by calling me an arrogant american, and then calling me a child. I went down to your level with the spelling issue.

Hey everyone on this board, dont disagree with anything Sir Terry says, you will be labeled an arrogant american and a child.

I'm done with you Terry!!! Bye!!

Okay, Let me get this straight, you need a SUV for your dog and yourself? You are kidding right? Do you go off road? If not, then why do you need a 4 wheel drive? They do make 4 wheel drive cars that are much more fuel efficient than a SUV you know.



Right! I have a black lab that comfortably sits in the passenger seat of my ugly hybrid. He can also comfortably sit on the floor even when I have had passengers(my friends love my dog).





My best friend who commutes with me to work is 6'4". He finds my ugly hybrid VERY comfortable.(he would not ride in it if otherwise) And you need a SUV. I am not saying that you shouldn't buy a SUV, what I am saying is that your choice is part of why gas prices are so high, and why you shouldn't ***** on bit about it.

Lastly, I am more about the issue which is much larger than how words are spelled. One of the most known online debate tricks is when you have nothing intelligent to offer to the discussion, then you insult the other persons spelling, or vocabulary. That is called spin, and this is a no spin zone.

[shokhead]

There's always been suv's and trucks,just a more buying them now and they have no effect on the gas problem because there isnt a gas problem,just rich wanting to get richer,come on. I bet prices will level out or drop a few pennys and then,oh by the way,summer is coming so opps,there goes the gas prices. Then after school starts up same thing and then,opps,shutting down some plants,there goes the price. I dont recall them saying we are driving to much more. Now maybe more new driver.. My fav story was a few years back,they asked us in Lakewood to really cut down on using water,i think it was 10%. We did such a great job it was 25%. Our reward,higher water prices. Why. They said darn you,you saved to much and we had to lay workers off and you made so many new problems that your water is going up. I've never worried about saving water since then. Like my friend likes to say,its all BS.

[Duds]

Excellent points.

I rember not too long ago, maybe two years ago, gas was like $1.25 give or take. I cant imagine THAT so many people bought so many SUVs in two years that it caused the gas prices to increase more than a dollar.

SUVs arent the problem

There's always been suv's and trucks,just a more buying them now and they have no effect on the gas problem because there isnt a gas problem,just rich wanting to get richer,come on. I bet prices will level out or drop a few pennys and then,oh by the way,summer is coming so opps,there goes the gas prices. Then after school starts up same thing and then,opps,shutting down some plants,there goes the price. I dont recall them saying we are driving to much more. Now maybe more new driver.. My fav story was a few years back,they asked us in Lakewood to really cut down on using water,i think it was 10%. We did such a great job it was 25%. Our reward,higher water prices. Why. They said darn you,you saved to much and we had to lay workers off and you made so many new problems that your water is going up. I've never worried about saving water since then. Like my friend likes to say,its all BS.

[Sir Terrence the Terrible]

There's always been suv's and trucks,just a more buying them now and they have no effect on the gas problem because there isnt a gas problem,just rich wanting to get richer,come on. I bet prices will level out or drop a few pennys and then,oh by the way,summer is coming so opps,there goes the gas prices. Then after school starts up same thing and then,opps,shutting down some plants,there goes the price. I dont recall them saying we are driving to much more. Now maybe more new driver.. My fav story was a few years back,they asked us in Lakewood to really cut down on using water,i think it was 10%. We did such a great job it was 25%. Our reward,higher water prices. Why. They said darn you,you saved to much and we had to lay workers off and you made so many new problems that your water is going up. I've never worried about saving water since then. Like my friend likes to say,its all BS.

I think anyone who says that SUV aren't a problem is seriously in denial, or totally ignorant of how market forces work. Back in the 70's(when I was a little kid) we had a serious gas shortage. Back then cars where not fuel efficient at all. The Japanese begin introducing smaller more fuel efficient cars(American car companies were asleep at the wheel) and they sold like hotcakes. We began to drive less, plan trips better, and use more efficient cars when we did drive, inventory loosened up, prices went down.

Since those years we have gone back to using gas guzzling cars, and we now have a added pressure, China and India. Both countries fuel needs have exploded, and OPEC really underestimated how much both countries along with ours needed. Tight inventories mean higher prices. If we drove more fuel efficient cars, plan trips, and took public transportation, this would reduce the amount of oil we use, and prices would ease as inventories of oil increased. That is called supply and demand. The more demand and tighter oil inventories are, the higher the price. So our increased purchases of SUV and gas guzzling trucks over the last 3-4 years have a direct correlation to the prices we are currently paying.

You can bury your head in the sand on this issue, but you will pay a heavy price for it.

[Sir Terrence the Terrible]

To blame the cost of gas on SUV's is absurd. How long has the V-8 been around? A long time, they've been in pick up trucks for many many years now. Remember the old muscle car days? I seem to hear a lot about the big V-8's they had too...

To deny that SUV's are not contributing to the problem is plain ignorance and denial. V-8's have been around forever, however their sales in the past have been small in comparison to more fuel efficient cars. Now the percentage of V-8's sold has dramatically increased, along with the sales of SUV. They use more gas. More gas leads to increased oil imports. More imports from our country along with China and India leads to falling world oil inventory. Falling world inventory means increased commodity price, and hence increased gas prices. The correlation between sales of inefficient cars and increased gas prices is so easy to see, that a blind person wouldn't have trouble pointing it out.

I belive you started this mess by calling me an arrogant american, and then calling me a child. I went down to your level with the spelling issue.

No, I didn't call you a ignorant American(please read what I said again) I called your thought process arrogant, not you. Your response was immature hence you being called a child. I still don't care about you correcting my spelling, that is nothing more than spin.

Hey everyone on this board, dont disagree with anything Sir Terry says, you will be labeled an arrogant american and a child.

I'm done with you Terry!!! Bye!!

Everyone who frequents this board has disagreed with me at least once, and they were never labeled arrogant or a child. It is only when you respond immaturely, and present a poorly thought out perspective that you get labeled those things.

By the way, my moniker is Sir Terrence, not Terry dude!

[shokhead]

BS. Nobody changed cars and after the gas supply was back,everyone went back to the way they drove and went on trips just like before. You might have been a kid but i was in line for gas so i do remember. I never,ever heard any of my friends or our parents have any concern about getting a 6 instead of a V8 or looking at a smaller car,never ever. Nobody cared about price,only that there was gas. The press,paper and tv are good about making it a bigger deal then it is. It is what it is, like you said,we demand it and they supply it,for more profit.

[Duds]

We're just arrogant Americans, that what it boils down to

BS. Nobody changed cars and after the gas supply was back,everyone went back to the way they drove and went on trips just like before. You might have been a kid but i was in line for gas so i do remember. I never,ever heard any of my friends or our parents have any concern about getting a 6 instead of a V8 or looking at a smaller car,never ever. Nobody cared about price,only that there was gas. The press,paper and tv are good about making it a bigger deal then it is. It is what it is, like you said,we demand it and they supply it,for more profit.

[shokhead]

Boy,isnt that the truth! And loving every minute of it . LOL

[Sir Terrence the Terrible]

BS. Nobody changed cars and after the gas supply was back,everyone went back to the way they drove and went on trips just like before. You might have been a kid but i was in line for gas so i do remember. I never,ever heard any of my friends or our parents have any concern about getting a 6 instead of a V8 or looking at a smaller car,never ever. Nobody cared about price,only that there was gas. The press,paper and tv are good about making it a bigger deal then it is. It is what it is, like you said,we demand it and they supply it,for more profit.

Your perceptions and reality are not in sync. It is a known fact(read Woochifers post) the small car sales far outstripped sales of V-8's and trucks during the gas shortages of the 70's. Toyota and Nissan sold more cars during and after the crises. Sales of smaller cars far outstripped sales of V-8's in that period.

Maybe your friends and family didn't have any concerns, but the rest of America certainly did. Check out the automobile companies that grew the most in the 80's. It wasn't Ford, Chrysler, or GM that is for sure.

[Duds]

Maybe once Congress gets steroids in baseball figured out, they can work on the gas problem. Now that Terry Schiavo has passed away, they can devote more time to this issue...

I wonder why the price of cds hasnt gone down? I mean, afterall, sales of cds have been on a steady decline for years now, yet the price hasnt dropped off?

Boy,isnt that the truth! And loving every minute of it . LOL

[paul_pci]

I think anyone who says that SUV aren't a problem is seriously in denial, or totally ignorant of how market forces work. Back in the 70's(when I was a little kid) we had a serious gas shortage. Back then cars where not fuel efficient at all. The Japanese begin introducing smaller more fuel efficient cars(American car companies were asleep at the wheel) and they sold like hotcakes. We began to drive less, plan trips better, and use more efficient cars when we did drive, inventory loosened up, prices went down.

Since those years we have gone back to using gas guzzling cars, and we now have a added pressure, China and India. Both countries fuel needs have exploded, and OPEC really underestimated how much both countries along with ours needed. Tight inventories mean higher prices. If we drove more fuel efficient cars, plan trips, and took public transportation, this would reduce the amount of oil we use, and prices would ease as inventories of oil increased. That is called supply and demand. The more demand and tighter oil inventories are, the higher the price. So our increased purchases of SUV and gas guzzling trucks over the last 3-4 years have a direct correlation to the prices we are currently paying.

You can bury your head in the sand on this issue, but you will pay a heavy price for it.

I definitely agree. My joke about the Hummer indicates so: Whenever you see a Hummer, you know where they're going: the gas station.

[Duds]

Not all SUVs get 8 mpg like the hummer does.

I definitely agree. My joke about the Hummer indicates so: Whenever you see a Hummer, you know where they're going: the gas station.

[Woochifer]

BS. Nobody changed cars and after the gas supply was back,everyone went back to the way they drove and went on trips just like before. You might have been a kid but i was in line for gas so i do remember. I never,ever heard any of my friends or our parents have any concern about getting a 6 instead of a V8 or looking at a smaller car,never ever. Nobody cared about price,only that there was gas. The press,paper and tv are good about making it a bigger deal then it is. It is what it is, like you said,we demand it and they supply it,for more profit.

Reality check time -- people DID alter their behavior during the two previous gas crises. All you gotta do is look at how the car buying market drastically shifted to smaller cars starting in the mid-70s. When the price of gas more than doubles in a matter of months (remember when gas went from $0.25/gallon to about $0.50/gallon), and you have gas rationing (remember the gas lines, and only being able to buy gas on alternate days depending on if your license plate ended in an odd or even number?), you better believe that people were scrambling to cut back on their fuel consumption.

The Arab oil embargo directly led to the rise of Japanese car sales in the U.S. Back then, midsized Japanese cars were not sold in the U.S. All that they marketed were their compact cars, and once the gas prices spiked, a lot of people in my neighborhood traded in their V-8 jalopies for Toyotas, Datsuns, and Hondas. My dad traded in his old V-8 Plymouth Fury for a VW Beetle. People initially bought those cars for their fuel economy, but soon found that they were pretty well designed and reliable, so they stuck with the Japanese nameplates even after gas prices went back down.

Don't believe that people were buying smaller cars? Just check a sales chart for cars in the early-80s and you'd see that the top selling cars were typically the Ford Escort, the Chevy Chevette, the Chrysler K-cars, and/or the Chevy Cavalier. All of these were four cylinder vehicles that got around 30 MPG and weighed less than 3,000 lbs. The overall vehicle fleet peaked in fuel mileage in 1986, and the overall fuel economy for the cars that we buy has gone down ever since. No coincidence that the mid-80s was when people began to once again expect that cheap gas was their birthright, rather than the fleeting commodity that it can be. When people are no longer confident in the stability of gas prices, then they adjust their habits at that point.

Like I said, it does not take much of a shock to the balance between supply and demand to create huge price fluctuations. OPEC tries to regulate the supply of oil so that it maintains a rough equilibrium, and systemic changes to the system are now making it more difficult to maintain that equilibrium. Increased global demand for fuel has made the entire system more precarious than before. Equally precarious is that we now import more of our oil than ever before, all the while increasing our consumption (driving less fuel efficient cars and building homes in the boonies that require two-hour work commutes). Don't think higher gas prices change how we buy cars? Just look at the price premiums and waiting lists for hybrids, compared to the incentives, rebates, and sharp sales decreases for the big SUVs.

[Woochifer]

I wonder why the price of cds hasnt gone down? I mean, afterall, sales of cds have been on a steady decline for years now, yet the price hasnt dropped off?

And if the price remains steady and the record companies do not try to increase demand by adding value to the product, then the sales will continue to decline.

Not all SUVs get 8 mpg like the hummer does.

Right, like the ultra economical 13 MPG Dodge Durango!