The summer of 2000 will be remembered as the season of high gas prices. The volatile prices at the gas pump are the leading conversation-starter in the office break room or at the water cooler.
The huge one-day price jumps the Midwest has witnessed have caused a lot of grumbling on the part of motorists. Businesses also are feeling the pinch for increased transportation costs.
It hurts a little to watch the fuel pump numbers blur by and reach totals we're unfamiliar with: $15, $20, $30 or more to fill up the gas tank.
However, a dispassionate look at the gas prices tells us that fuel is still a bargain in relation to other items we pay for. Costs for housing, food, medical and education services all climb from one year to the next. Why shouldn't we expect gas prices to go up?
Twenty years ago gasoline accounted for about 5 percent of the average household budget, the Star Tribune of Minneapolis reported recently. Today the figure is about 3 percent. This decrease comes despite the fact that more miles are being driven and gas-guzzling trucks and sports utility vehicles are more popular than ever.
When gas prices first started to soar the same newspaper published graphics comparing price increases in various categories from a period in 1982-84 to 1999. They were:
Gas -- 7.2 percent.
New cars -- 38 percent.
Coffee -- 55 percent.
White bread -- 90.6 percent.
Physician's services -- 148.4 percent.
College tuition -- 219.5 percent.
What shocks consumers, of course, are the one-day spikes that send gas station employees out to their signs with long poles to change the price numbers on the street corner. The gas industry has been so unstable that motorists are scratching their heads with one hand and fueling up with the other. It's the unpredictability of this crazy market that has been so infuriating.
It boils down to those old economic taskmasters, supply and demand. And while we don't have any quick and easy suggestions about what to do about rising gas prices we know of two things the government should not do.
The Clinton administration should not listen to those who are calling for the U.S. to break into the strategic oil reserve. That's a bad idea based on the notion that it might stir OPEC nations to increase production. The government would be better off if it kept its hands off our reserves until a real emergency crops up.
A second bad idea is for Gov. Jesse Ventura to call a special session of the Legislature to consider repealing the gasoline excise tax. Those revenues are a key component of state budgets and to curtail them would damage the state's efforts to maintain highways and mass transit.
Some politicians will call for quick solutions in order to give the appearance of aggressively working on behalf of their constituents. The prudent politician will realize the limits of political power in the world of fluctuating gas prices.
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