The Department of Transportation reported Friday that Americans are driving 4.3% less from this time last year (that's 11 billion fewer miles).
Ford Motor Company's Mark Fields (President of the Americas) says, "Rapidly rising commodity prices -- particularly steel prices -- and higher gasoline prices that are accelerating consumers' shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009."
Just before the Memorial Day weekend I overheard some interesting conversations in the elevator... One person saying she had been planning to drive to Savannah to visit friends and hang out - but now she'll stay in town and do other things instead. Another person complained about the price a car dealership bid on his used SUV tradein - he said, "I can't afford to swap out to a hybrid - their offer on my trade-in doesn't even cover the loan I have on it." A friend offered, "you could ride MARTA - aren't you near the Chamblee station?"
If you are interested, here is a very well done presentation on what's driving gasoline prices and where they might be headed in the future. But in decisions where gasoline looms as a key driver, you (and everyone else) already have what you need to make a good one - its price.
Thanks for this post, Ben. I was just having a conversation this past weekend with some family and friends regarding what drives the gasoline prices here in America and the linked presentation was great support for my arguments: that there aren't a handful of greedy speculators in the US driving the oil price for all; that we are paying substantially less than other places; that supply and demand really are driving the price of gas at the pump and while we have reduced our consumption here in the US it doesn't offset the increased demand across the globe. I'll be using this post and subsequent presentation in the future. Thanks!
Posted by: John Cooke | 03 June 2008 at 10:06 AM