Volatility in oil prices is based on several factors neither producers nor consumers can control, from Mideast turmoil and war to hurricanes in the Gulf of Mexico to the most recent variable, the pending shutdown and repair of an Alaskan oil pipeline supplying 8 percent of the nation’s daily oil production.
But what consumers can control whenever the latest price-affecting event occurs is themselves. Many of the people who grumble the most about price hikes are the first in line at the gas station topping off their tanks, which only exacerbates the situation and saves them precious few dollars, given that such behavior is virtually guaranteed to result in higher pump prices the next time they pull in.
The repair of the pipeline, which necessitates the shutdown of BP Exploration Alaska Inc.’s production of 400,000 barrels per day, could raise pump prices by up to 10 cents a gallon and cause oil prices to rise by up to $10 per barrel, analysts told the Associated Press.
That’s not counting any panic buying on our part.
When an Arizona pipeline shut down for several days in August 2003, consumers embarked on an orgy of tank-topping that resulted in station after station running out of gasoline, creating long lines for it at the few stations that had any. Last year’s Gulf Coast hurricane devastation led to similar, though not quite as pronounced, panic buying.
Tied as it is to global demand and strife in oil-producing areas of the Middle East and Africa, this nation’s oil future will remain on edge until long-term solutions through new exploration and new refineries are found and implemented.
Meanwhile, as painful as market-based higher prices are, they do help to temper the demand, allowing for more product to be available for more people. What many consumers cry out for during steep price rises, government-set prices, only would encourage higher demand for gasoline that isn’t there, leading to shortages and empty pumps — and long lines at the fewer places where there is gasoline.
What we can do as consumers is keep our vehicles in their most efficient working order, combine tasks that require us to drive and eliminate unnecessary trips. The gasoline price levels we would thereby be helping to stabilize are no one’s creation but our own.