| 7/16/2008 | Email this article Print this article |
By John Portella For The Almanac writer@thealmanac.net Jennifer Dos Passos is taking steps to manage the high cost of gasoline. "I ride the 'T' to my job downtown and combine tasks when I use the car-going to the supermarket, post office and drug store all during the same trip," she said. Dos Passos of Bethel Park, who works as a reference librarian in the cultural district, added that "I also walk wherever I can." According to AAA, Pittsburghers are now paying about a nickel less than the record $4.11 national average for regular self serve gas. This is over a dollar more than last year at this time and mostly reflects the unprecedented high cost of crude oil, which went over $145 a barrel in New York on July 3. Last year it was $65.
The price hike was recently addressed by Pennsylvania's Democratic U.S. Sen. Bob Casey in an appearance at Station Square. The senator said that energy speculators "are driving up the cost of oil as they try to profit from the pain that Pennsylvanians are feeling at the pump." He has supported a Senate bill (S. 2991) called the Consumer-First Energy Act of 2008, to prevent crude oil traders from using off shore transactions to route their deals - the so-called "London-Dubai Loophole." The bill would also amend the Sherman Antitrust Act so that the government can act against companies or countries that collude to send prices up. The legislation will likely have little immediate impact on the market factors affecting today's record prices. These include the growth of Asian demand, the falling value of the dollar, and the risk premium attached to actual or possible conflicts in oil producing and transit areas. Between 1998 and 2002, for example, world oil demand grew by 2 million barrels a day. From 2003 to 2008, it has gone up 8 mb/d, much of it in China and India. Over the last six years, the dollar-the currency in which oil is priced internationally-has lost more than one-third of its value against an index of seven other currencies. On June 6, the dollar declined one percent versus the euro, and the oil price in New York then jumped $10.75, the largest one-day increase in 25 years. On the same day, Israel concluded a military exercise in the Eastern Mediterranean that simulated an attack on Iran's nuclear facilities. This added to the risk of an interruption of the oil flow in the six-mile wide Strait of Hormuz, through which 15 million barrels pass daily, 40 percent of all oil shipped worldwide.
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