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Rising gas prices hit drivers nationwide



June 18, 2009 – Comments (1) | RELATED TICKERS: GAS.DL2

The current Administration believes that the "Make Work Pay" tax credits that amount to around $10 per week or something like that will help revive the sluggish U.S. economy.  Unfortunately, just like the last time we sent out a round of stimulus checks I am afraid that most of this money will be used by consumers to help pay for the rising cost of gasoline.

The price of gas has increased for a whopping 50 consecutive days to a national average of $2.679/gallon.  Before this run started the price per gallon averaged $2.05.  Let's see how much extra this increase costs consumers every time they fill up their vehicle.  I believe that the average light vehicle in the U.S. has a gas tank that holds around 17 gallons of fuel.  If you take that 17 gallon capacity and multiply it by the $0.629 increase in the price of gas over thepast 50 days it comes out to...wait for it...$10.693.  What a coincidence, nearly the exact same amount as the stimulus if one fills up a vehicle once per week.

This increase in the price of gas, if it sticks, is going to act as a major drag on consumer spending and in turn on the economy going forward.

Rising gas prices hit drivers nationwide


1 Comments – Post Your Own

#1) On June 18, 2009 at 11:44 AM, carcassgrinder (33.13) wrote:

It's beautiful....investors and media pump it until a case of the FU Virus spreads through industry and consumers....then, in an act of ambivilence, investors will treat the infected by shorting oil it until the virus seems to subside.  But the virus never truly subsides, it only transfers hosts.  Ineveitably, as the price of oil returns to  where the industry and consumers can operate loosely...the viirus will infect OPEC.  Thus, media and investors will repeat the process. 

I would call this behavior insanity, but those involved know the outcome, so it doesn't fit the definition. 

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