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Why GAS Costs $2.00 Per Gallon

 

By John R. Prukop <ccw@wolfenet.com>
Executive Director CCW Coalition:
Citizens For A Constitutional Washington
3-29-00
 

 

The graying trucker wore a detached look as he topped off the tank of the blue and chrome 18-wheeler. The meter on the pump clicked $235.00, at just under $1.76 per gallon. "That's a lot of money for fuel," I commented, "How do you independent guys make it?" He focused on me for a moment, and then answered, "I'm going to put this one on my Visa, if it isn't already full."
 
That same week, in a Middle Eastern country, a busload of Americans were stretching their legs during a fuel stop. A W. Blumhorst, calculating the conversion of gallons to liters and native currency to US dollars in his notebook. He watched the attendant pump diesel fuel into the European made bus. "Do I have this figured right?" he asked the English-speaking bus driver "Is it possible you are buying fuel for four cents a gallon U.S.? Are you really going to fill this bus for a $10.00 bill...? Maybe I should take a gallon home to Missouri or they will never believe me!"
 
One week later the American evening news featured a parade of Independent truckers driving their tractors through the streets of Washington D.C. protesting run away fuel prices. Truckers will tell anyone in Washington who will listen that at $2.00 per gallon for diesel many independent trucker cannot afford to fill their tanks. The per mile cost of running the rig consumes his operating margin, leaving not enough to send home to the wife and kids. No matter how many miles he drives or how much load he pulls, he just cannot cover his payments on the rig plus his family's expenses back home. Like other small businessmen with an investment, the trucker is caught in a price squeeze.
 
He can only do what he knows how to do, drive and run up the credit card bills while he watches his equity in his rig disappear and pays for a break. Soon, he will tell you, that he will be three payments behind on his rig and there will be a bank collection agent looking for him at the house. Not a pleasant thought for the family to face while the trucker is on the road. The payments and interest on his investment continues whether the truck runs or sets idly in a truck stop, as some have done.
 
The truckers do not agree on what they think the President should do to lower fuel prices. As a stopgap measure they hope Clinton will, like a merciful king, take off the 24 cent per gallon federal tax on fuel. They reason that with a 24 cent drop in diesel prices they might again eke out a few cents a mile and eventually paying off the rig, hopefully before it needs new tires or a major overhaul.
 
Indeed, the trucker's action is really one of desperation. The effect of the vaulting oil price has only begun to hit most American consumers the way it has impacted the trucker. We notice higher gas prices but most of us do not measure our lives from pump to pump. We consumers are downstream from the price increase. Sure, it hurts to fill the car, but we have a tendency to forget that the cost doesn't stop there. Soon we too, will feel its effect in every product we consume or use, from lettuce to airline tickets--- even insurance, utility costs and the cost of government itself will all be escalated by the oil price rise. For America still runs on energy, and energy is still oil.
 
The trucker will soon be joined in his plight by millions of independent farmers caught in exactly the same mousetrap of leapfrog cost for everything they must purchase. They too face competitive revenues and grinding interest payments on their capital. And as the independent farmers continue to be driven to sell out to the multinationals, the fuse begins to burn on a food price explosion unprecedented in our history.
 
The economic sophists deny the trucker's solution will solve the problem. Those bright young men work for the corporate high-rise world and the cloisters of the multinationals who can afford the gas. They will scoff at the trucker's "simplistic" economic theory. They will speak of fuel economy, marginal efficiency of the trucking industry, and the need for international control of "OPEC " and other greedy producers. Their answer will be more international controls over prices and productions quotas. They will say the trucker is the victim of "fragmentation" in an industry that needs consolidation. In other words, their solution is that the independent trucker (like with the independent farmer) must go out of business. What they do not say is if that happens every consumer will share the cost in drastically higher prices for basic goods and services.
 
The trucker is correct in blaming Washington. Many know or suspect what Mr. Blumhorst learned on his trip to the Middle East, that there is enough oil in the world to keep energy prices low if they were only allowed to buy it. It sell for pennies a gallon in those producing countries that are not in the good graces of our self serving Government leaders and their Warmaker bosses.
 
The trucker feels the source of the problem in his gut. It is too bad we do not all feel it. Beware those who try to complicate the answer of high fuel prices are hiding the real answer. We should follow the trucker's problem and blame Washington. But until the trucker and millions of consumers who share his problem come to an understanding of why the oil price is escalating, it will not be solved.
 
In fact, there is plenty of oil, refining capacity and transportation to get it to us, but inexplicably, we are not allowed to have it. The problem is very simple indeed and the solution could begin before the trucker's next payment on the rig is due and is within the reach of the elected congressman. That solution is to allow us, the American consumer, to PURCHASE OIL FROM WHOMEVER WANTS TO PRODUCE AND SELL IT.
 
In this series of " Heads Up!" we will examine the common sense of oil, and with it the future of food, transportation, housing and almost everything else you consume or use. The questions to be answered are, "Who is really to blame for high prices? Why? What is the impact on the rest of the world?"
 
Gasoline is selling for a nickel a gallon in Iraq, and a single dollar will buy 25 gallons of diesel fuel because Iraq is not allowed to sell its oil. In Iraq children are starving while American bombs still fall regularly on the survivors. Yet American truckers and farmers cannot produce and haul food for lack of fuel.
 
Would you like to help millions of Americans learn why? If so, put your shoulder to the wheel of the Truth Machine.
 
See the WHTT bookstore (http://www.whtt.org/bookstor). Ask about the audio tape interview, "An American Visits the Children of Iraq."
 
"Heads Up!" -- Copyright 2000, story may be reproduced in full for non-commercial use.
 
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"Reason obeys itself; and ignorance does whatever is dictated to it." --Thomas Paine, Rights of Man ("Conclusion")
 
"All laws which are repugnant to the Constitution are null and void." --Marbury v. Madison, 5 U.S. (2 Cranch) 137 (1803)
 
CCW Coalition: Citizens For A Constitutional Washington John R. Prukop, Executive Director 11910-C Meridian Ave. E., #142 Puyallup, Washington 98373 TEL: (253) 840-8071 FAX: (253) 840-8074 e-mail: ccw@wolfenet.com
 
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