Cost of fuel hitting the home front

The average price for a gallon of gasoline as of today is $3.84. Diesel? Around $4.12. As of now, there doesn't seem to be any relief in sight, especially for a significant chunk of folks who commute to points out of the county each day. And the impact of higher prices are beginning to hit pretty hard as indicated by some local residents:

Lori Brawley:

"Putting gas in 3 vehicles is about to break us. Spent a total of 810.00 on gas in the month of Feb."

Amber Coleman:

"I am looking for a job closer to town cause driving to Belton to work is costing about hundred a week- any pharmacy need a good tech around town?"

Kenny Lawrence:

"Staying home!"

Sarah Ayers:
"Only go somewhere when it is a absolute must. Wished I would have not sold my Festiva. Ugly car although 40 mpg does make that car look better better every day...At least now it does that I don't own it anymore...LOL!"

Mary Tyner:

"I was spending my whole paycheck on gas when I was driving to school 5 days a week which ended today. I gave up internet and never had tv to pay for gas and only went to the laundry mat once every two weeks all because of outrageous gas prices."

Daniel Hatten:

"My diesel looks great, sittin out by the barn."

Is it a supply and demand problem? Yes and no- it depends on where you are. While demand in the USA is about a million barrels of oil per day less than it was in 2005, it's up significantly in China and India. Global oil consumption is expected to increase by 800,000 barrels a day to 89.9 million barrels a day by 2012 - and Asia is consuming 700,000 barrels worth of that increase. As Chinese and Indian consumers start buying and driving cars in large numbers, their share of global crude demand will only increase, and the oil industry will be hard-pressed to keep up. Note the tables are turning as the USA slips away from being the biggest petroleum user in the world.

Besides the above listed issues, the possibility of a war between Iran and Israel has also driven up price based on speculation as well. And the longer this drags on, the longer prices are certain to stay up.

On that note there's another potential problem- a change in the currency used to buy oil. Right now it's all done in American dollars, which gives us an advantage. However, there is a big push to change that, to possibly Euros, and that alone could put us at a huge disadvantage considering that the Euro is stronger than the Dollar. While this remains to be seen, there is a big push to ditch the dollar as other countries use more oil and have a bigger influence in the marketplace.

Is the price going to come down any time soon? Possibly not. Even if we (the U.S.) started drilling now it won't be soon enough for relief this Summer, but would certainly help on down the road. The situation with Iran and Israel could go on for quite a while too. Tapping our reserves is very temporary solution, as it would only last a few months based on our current level of consumption.

For now the best answer lies right where we thought it should be- in common sense. Cut back and do what it takes until the situation gets better.