(((Via Treehugger.)))
http://blogs.moneycentral.msn.com/topstocks/archive/2008/05/06/a-scary-thought-gasoline-at-7-50-a-gallon.aspx
Link: A scary thought: Gasoline at $7.50 a gallon - Top Stocks .
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If crude hits $150 a barrel, we could be looking at $5 a gallon or so for the retail price of gasoline. That's based on Tuesday's $3.61-a-gallon national average and the rule of thumb that, for every $1 increase in crude oil, the pump price rises 5 cents a gallon.
If crude hits $200, the retail price of gas jumps to $7.52 a gallon. (Plus or minus a few cents) To fill the 10-gallon gas tank on my Honda Civic would cost $75.20, probably more because I live in Washington state, which has relatively high gasoline taxes. (...)
Gasoline at $7.50 a gallon is something nobody should go into denial over because there are going to be big problems from prices at levels I've suggested, including:
Will there be any U.S.-based auto manufacturers left? The answer depends entirely on how fast they can transform their product lines. Chrysler is in deep trouble already. That probably means more stress for the Midwest.
Will there be any domestic airlines left? The so-called legacy airlines (American, United, Northwest, Delta and Continental) would either try to combine into one big carrier or simply disappear. They're having serious troubles surviving as it is. This means big troubles for cities where these airlines operate hubs that generate thousands of jobs like Atlanta, Cleveland, Newark, Houston, Chicago, Denver, Dallas, Memphis and Minneapolis-St. Paul.
How will big convention cities survive? Places like Las Vegas, New Orleans, Atlanta, Chicago, New York, San Francisco and Houston have thriving convention industries, all built around the capacity of airlines to transport conventioneers to and from the destinations relatively cheaply. Emphasis on the word "cheaply."
How will tourist destinations like Florida or Hawaii cope? Add to that places like, say, Williamstown, Mass., whose Williamstown Theater Festival is a big draw, or Ashland, Ore., home of the Oregon Shakespeare Festival. They're not close to major cities.
Although as Douglas McIntyre noted on Blogging Stocks, gasoline at $3.50 a gallon has not cut demand enough to force prices lower, there are signs that adjustments are being made. Sales of big, gas-guzzling SUVs and pickups are slumping. Consumption of gasoline in California fell 4.5% in January from a year ago.
The Department of Energy believes that domestic consumption is likely to fall more steeply than expected this year, the New York Times reported Tuesday. It is forecasting that domestic gasoline consumption will fall slightly this year from 9.29 million barrels a day in 2007 to 9.23 million barrels a day this year. (That's about 140 billion gallons a year, enough to fill my Honda for, well, a very long time.)
Sales of homes in outer suburbs are falling and not just because of the credit crunch and the subprime mortgage mess. Look at the stock prices of U.S. airlines, down 90% in the last 10 years.
Many commentators have wondered at the ability of Americans to grin and bear higher gas prices. But grinning and bearing it is losing any sense of fun. It's just gotten expensive: Over the first four months of 2008, as Peter Beutel of Cameron-Hanover noted this week, gasoline has cost the United States $757.24 million a day more than in the first four months of 2002.
That’s more than the estimated $720 million a day spent in Iraq....
