In mid-August, our gas bills increased by 3.5% over the previous month, bringing our gas bill in one month to more than $1,000.
In other news, a man who apparently had several drinks during a bar crawl in January set himself on fire in the parking lot of a Walgreens to protest the store’s price increase. Walgreens was very un-Walmartish about the whole thing and the fire caused no more than 60 gallons of spilled gas to be consumed.
I was at work on Tuesday and found out that I had a gallon of gasoline in my driveway by the side of my house! I was out of the house and when I came home the front door was open and the gas tank was on the fritz. It had been there for three days, but only at 7:15 in the morning. So I went to the station to get it filled up. I got there and found the tank was full.
The gas station is probably the one most people think of when they hear gas prices. So, I suppose it’s not a surprise that Walgreens is very un-Walmartish about this. Maybe because they’re already paying a lot of money for gas and are probably hoping they’ll be able to get some of that money back.
It is a surprise to me. I had no idea that the station was so un-Walmartish. To be honest, I didn’t think the price was that bad and I think the reason I didn’t think it was so bad was because it was at least a fraction of what Walgreens were paying 6 months ago. I think a lot of gas stations in the area have been cutting their margins for the last 4 years or so.
That’s the good news. The bad news is that gas in the US is going through the roof. The average price is about $3.25 per gallon, which is about 30% more than it was in 2006. That’s crazy. There are some exceptions, but most gas stations are feeling the pinch. The big news is that the Obama administration is talking about cutting gas taxes. It is widely understood that the Obama administration plans to reduce the gas tax by an average of $.
The gas tax was introduced in 1993. With the exception of a few tax increases in the early years, it has never been more than an average rate. The gas tax is a rate of 13.3 cents per gallon. The average price of gas in the US is close to 30 cents per gallon. This is why I am surprised that the Obama administration is considering cutting the gas tax to help offset the price of gas.
The reason is simple: there is very little fuel in the US due to oversupply. We have so much oil that our domestic oil production is more than double what it was just 20 years ago. Our domestic oil production is about 10% more than it was just 20 years ago. The result is that there is no gas left to pump, so the only way the government can get their hands on the money it takes to pump gas is by selling it to us.
The plan is that the government will cut the gas tax to help offset the price of gas. It’s not a great plan, but it’s a plan. So let’s take a look at it.
To begin with, the government is going to take a 20% cut in the gas tax. This is the first cut. The 10% cut we have been getting for years will fall to 8% and will be rolled into the new 10% cut. So basically, if the government reduces their gas taxes by 20% they are going to increase the gas prices by 20% (which is still less than inflation).