Gas prices in my next of the woods are about $3.60 per gallon. The national average is slightly higher, or so my sources tell me. As always happens when prices go up, Republican pundits are in overdrive, trying to blame this on President Obama. Cute little graphics showing that the price of gasoline has risen from about $1.80 per gallon to its current level during Obama’s Presidency are popping up on every conservative blog and website you’d care to name. Message board posters are getting into the act by the dozen. It’s a curious phenomenon, that while the President has done so many things wrong, the Republican mob attacks him for something that’s totally unrelated to anything he’s done.
Indeed, it wasn’t so long ago that Repubicans typically expressed belief in the free market. Producers of a product offer it at a certain price, and customers may choose to buy it or not. When more customers want to buy it the producers raise their price to get more money. When there’s less of the product available, customers are willing to pay more to ensure that they get enough. These two forces, supply and demand, determine the price of the product.
Right now, gas prices are rising because of supply and demand. On the demand side, hundreds of millions of people in places like China and India, who formerly moved around on bicycles or donkeys or even (gasp!) on foot, are now able to afford cars, and thus they need gasoline. This means higher demand. On the supply side, deposits of petroleum are running dry in many places. While a few new deposits have been found recently, they’re not much in global terms, so worldwide production has been close to flat for years:
Combine these two effects and what do you get? Higher prices, of course.
(The subject continues here.)