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"The prices that we're paying at the pump today are, I think, going to be 'the good old days,' because others who watch this very closely forecast that we're going to be hitting $12 and $15 a gallon, and then, after that, when world oil production goes into decline, we're going to talk about rationing," said Robert Hirsch, Management Information Services Senior Energy Advisor, talking to CNBC. He noted that along with significant rise in oil prices, consumers will see shortages including not getting oil when they need it.
According to a report on The Economist, “The price of oil may soon hit $200 a barrel—or so, at any rate, believes Shokri Ghanem, Libya’s oil minister. A few years ago such a prediction would have seemed absurd. But the price has doubled in the past year and has risen by 40% this year alone.” The report also said that the demand for oil is rising sharply in contrast with production. Global demand, meanwhile, continues to rise, thanks to an ever-increasing thirst for oil in fast-growing developing countries such as China and India. Their increased consumption is more than compensating for falling demand for oil in rich countries.”
“Our economy and way of life – especially in sprawling, car-crazy North Texas – depends on a steady and affordable supply of oil. It can't last, because oil is not an infinite resource. We might not be at the end of the cheap oil era yet, but when that day comes, its dawn will look something like what we're living through today,” states an editorial in the Dallas Morning News.
Who would have thought that Americans will consider changing their lifestyle based on market conditions such as oil? I still remember President Bush boasting about driving big SUV. It never occurred to me that one day I will have to ‘plan’ my driving. One of the great benefits of living in the United States is the freedom to move around. If you wanted to go somewhere, you just go. If you felt like moving, gasoline and inflation was not the reason stopping you. It was the America, where little things could not affect us. We all thought (as people always do) that bad economy won’t happen to us. And like all the other nations we learned that no one is invincible.
About a week ago, Ford Motor Company announced that it is cutting production of large trucks and sport utility vehicles as higher pump prices lead consumers toward more fuel-efficient cars. “Ford has taken a more radical step: with the market share of SUVs having plunged from 14 to just 9 per cent in 12 months, the company will build 350,000 fewer vehicles this year, a move that will almost certainly involve more job losses and plant closures, while delaying profitability,” reports TimesOnline.co.uk. “Ford is also planning to bring the Fiesta to the US later this year – the first time that the small hatchback will have been sold in America since the 1970s oil crisis.”
A tank of gas now typically costs more than $100 for a SUV – compared with just $30 five years ago. Ford Expeditions, Dodge Rams and Chevy Suburbans are cluttering up dealer lots around the nation. “Chrysler – which owns the fuel-inefficient Jeep brand – has gone so far as to give customers credit cards that guarantee petrol prices at $2.99 a gallon for three years. Its scheme is called ‘Let’s Refuel America’”, states TimesOnline.co.uk.
It seems like we have not learned our lesson yet. We have failed to acknowledge the transportation infrastructure problem in our towns and cities. The mainstream media (as one would expect) has not helped either in digging for the cause of the issue. So how well are we handling oil prices and inflation issue?
Blame those Chinese & Indians
Since we can never be at fault, it must be the darn supersonic growth rate in China and India. Why do they have to progress so fast? How dare they grow so fast? "The demand from China and India was placing extra pressure on petrol availability, Mr. Rudd (Australian PM) told parliament," reports News.com.au.
"To China we must, of course, add Indonesia, India, Mexico, Brazil and the other populous emerging markets which are developing fast, and whose cars, factories and construction firms will demand more and more energy in the years to come", states a piece in the Telegraph.
The oil cartel won’t increase production
"Make no mistake: OPEC is responsible. This can be seen clearly by comparing OPEC and non-OPEC oil production since 1973, when the cartel's governments took effective control of the Middle Eastern oil supplies away from the international oil companies. Since 1973, non-OPEC oil production has doubled, in tune with the doubling in size of the world economy over the same period. However, while OPEC has engaged in many wild, short-term production expansions and contractions to manipulate the market, overall OPEC production has barely increased over the past third of a century despite the fact that they are sitting on top of 80 percent of the world's oil reserves — including all the most accessible oil reserves. This shows that they have had a long-term policy of limiting production in order to increases prices. As economic growth in China and India increases worldwide demand, the OPEC policy of strangling production is threatening to send the U.S. economy into a depression," writes Robert Zubrin in a column on washingtontimes.com
Other usual suspects who are ‘out there to get us and take away our SUVs’ include none other than Venezuela, Iran and other socialists, simply because they hate us. We refuse to analyze the problem in proper perspective. Going to war with the problem has never worked before nor will it work now. As long as we are willing to sit down and approach the causes in a rational manner, we will continue to slide down this spiral path. May Allah Guide us all.
Start a new movement out of fear
Financial guru Dave Ramsey reminds his audience to avoid making decisions based on fear. Islam also teaches us to calm down before making any decision. However, all the king’s men from experts, officials to the media, want us to “adjust”. The media with all its mighty resources and insider contacts have failed or ignored to report the facts behind price manipulation. Instead they want to help us save more by recommending buying something else.
The entire mainstream and powerful news media’s message to us is can be summarized “accept the fact that life sucks and you can’t do anything about”. Let us recommend some ideas and products (sponsored by our advertisers). Surf through TV channels and you will nature loving green movement everywhere.
Suddenly energy efficient products are popping up everywhere. Light bulbs, washer dryers, insulation, paint, windows, AC, heating and now clothes! Environment friendly clothes? Are you kidding me? So I should spend hundreds or thousands of dollars to save a few dollars in a year? This is the solution to artificial inflation? Who is doing their math? I don’t understand –may be someone from the Clinton campaign is in charge of these calculations.
I love the experts who come up with behavioral tips to save energy. Some are listed below:
- Slow down when you can.
- Combine your errands in a single trip.
- Stagger work hours to avoid peak rush hours.
- Why not telecommute?
- Use carpools and ride-share programs.
- Ever heard of public transit?
- Drive sensibly: avoid aggressive driving, such as speeding, rapid acceleration and braking.
- Turn off the light when you leave the room
- Don’t run the washer dryer empty
What the heck will that do to corruption? Why in world should I cut down more? It does not make any sense to increase restrictions on common people. Why should I brake less to save some gas? Why? Can someone give a good reason why?
I would like to point out that I do not endorse or advocate unnecessary consumption. The Prophet Muhammad (PBUH) advised us not to waste water even when we are standing by a river. Islam has placed tremendous importance on properly managing resources. However, the current problem is not as simplistic as a supply and demand issue being portrayed in the news media.
“Soaring oil prices are increasingly the result of speculation, financier George Soros said in an interview. The billionaire investor said the money pouring into the oil market increasingly had the look of a bubble, but that it would not burst until both the United States and Britain were knocked into a recession. ‘Speculation ... is increasingly affecting the price,’ Soros was quoted as saying by The Daily Telegraph. ‘The price has this parabolic shape that is characteristic of bubbles’," reports the International Herald Tribune.
Environment, political turmoil, food price inflation and supply shortages are not the problems. As long as we focus on addressing the symptoms, the problems will only snowball. Somehow in this advanced information age, misinformation has taken over. Being in the media business I have to go through the painstaking process of listening to news media. I call it news circus. Layer after layer of useless analysis and tied together with shocking briefs from the entertainment world. Never ever do they forget to recommend that you buy something. Hiding behind this misinformation is the same cause, which resulted in soaring oil prices; greed & ignorance. Or is it greed because of ignorance? Readers, please help me out with this. What do you think?
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