Crude is below $70/barrel but retail prices are still well above $3.00. When retail prices first spiked, we were told it was a direct and instantaneous result of crude.
Several stocks/funds I watch also follow crude prices. SU, HAL, and of course OIH among others track closely with crude. These stocks have fallen in direct correlation with crude prices in the past week.
So what’s up?
Nothing. We are being gouged. Deal with it. Energy is a commodity that most of us cannot stop consuming. The prices we see now are a direct result of the lack of energy alternatives and the inability to mitigate rising fuel costs without significant personal sacrifice. Much of this is by choice. I have a business which mandates a specialized truck with a high weight requirement. This is the exception to the rule. In everyday life, few of us are bolting 1300 lb chunks of steel to the back of their trucks which is why I have been able to get by with a light duty truck for all other uses for the past 11 years. I've carried some very interesting loads with that light truck too!
Dealing with it: The family go-kart. There are a lot of us buying rigs with a much heavier capacity than what we really use. The major caveat to owning a big rig is that families are seldom buying a family 25-30 MPG beater to supplement the family mega-hauler. If you’re getting 10 MPG it’s not tough to figure out that an investment in a 25 MPG rig for single person commutes over large distances makes sense.
Another point. Recall back in the 1970’s when fuel became a touchy point? Many families started their own petroleum reserve. Those with a stockpile at $2.70/ gallon are feeling pretty smart right now. Of course, think twice before putting an underground gas tank in as you could be creating a larger liability than you are solving.
A topic for another day is the economics of fuel alternatives. There are no right answers at this point, only great debates. Would you pay $15.00 for a hamburger? Perhaps. Especially if everything else on the menu were $100.00.
No comments:
Post a Comment