Tuesday, April 3, 2012

$10 Gas? Not Really!

Gas at $10 is a myth. China's big boom is over. Their cities are so congested and polluted that they can't absorb more cars so their demand for gasoline should level off.

Similar story for Brazil where Sao Paolo just exceeded 19 million people. In such vast and growing cities rail systems are an obvious need. The explosive growth in demand for oil distillates from the BRICs (Brazil, Russia, India and China) will subside significantly soon. Most of the problem in gas prices is actually created by the restrictions of the EPA and the President.

$10 per gallon of gas is called ... Greece, Italy and several other countries where most people drive 40+ mpg cars instead of 20 mpg cars. In this way, their relative cost for fuel is roughly the same as ours. People find a way to assure themselves independent, flexible transportation. See more in this post: Gasoline Price Comparisons: Taxes not Octanes Matter

People in Hawaii can adjust should gas prices "explode." I am still amazed at the $30K to $50K trucks people buy when a hybrid family sedan is much safer and less than $30K to buy -- let alone the sub-$20K and over 35 mpg compact cars available in the market. There is a lot of room for downsizing in Hawaii.