For those who love nostalgia, here’s a memory for you. There were actually days in the fifties and early sixties when ‘gas wars’ were a routine part of American life. Across the country, gas stations would slash per gallon prices to ridiculously low levels. You could fill up a V-8 road yacht—the car of choice—for five dollars. You might even get a set of glasses or mugs with a fill-up. It’s a memory that seems almost ephemeral contrasted with today’s pump prices, now at around five dollars a gallon and threatening to jump even higher.
Much of the public’s anger over the stratospheric prices is directed at President Biden. Of course, he’s an easy target but probably not the one—or the only one— to blame, says the American Petroleum Institute. In simple terms, said API, it’s market forces, supply, demand and the price of crude oil. Right now, a barrel of oil is at a seven-year high. Toss in a war threatening Eastern Europe, the residue of a pandemic and the never-ending politics that have made a true energy policy a pipedream and, said API, you get record prices.
The President has scheduled a visit to oil-rich Saudi Arabia next month where he hopes he can twist arms, cajole or offer some sort of quid pro quo to prime the pump and get more crude flowing. But, said Metropolitan State University Denver’s Alex Padilla, don’t expect a quick or easy negotiation. “They just want to make money,” said the economics professor. “If they (the Saudis) think prices are going to keep going up, they’re going to hold on to reserves and delay further extractions of oil.”
The President also announced that he is seriously considering a holiday on the federal gasoline tax which now sits at 18.4 center per gallon. A decision, he told reporters on Monday, will be announced by the end of the week. The upside to a suspension would be immediate relief to consumers at the pump. The downside, and one that he might have to defend from both within and without his party, would be the loss of revenue which could total an estimated $15 billion. It is also money that is earmarked for the nation’s road repairs.
Colorado is trending slightly behind the national pump price. According to AAA, the state average of $4.90 per gallon trails the national average by nearly a dime. Prowers County, located in the far southeastern corner of the state has the lowest per gallon price at $4.70, The Western Slope and Pitkin County are the highest at just over $6.00 a gallon. A year ago, the national average for a gallon was just over $3.00.
Of course, it’s not just drivers complaining about fuel prices. Air travelers are also seeing the price of tickets soaring. Airline tickets have risen 25 percent in the last year, the biggest jump since the Federal Reserve began charting this cost in 1989. April showed the biggest jump with the price of a ticket climbing by 18.9 percent. Still despite record prices, Americans filled airports on Fathers Day with record numbers. Travelers also experienced a lot of frustration with thousands of flights cancelled. The cause: weather, staffing and demand.
As Americans scream about pump prices, big oil is doing its best to stay silent about record profits. President Biden has also been critical of the industry for not doing more to increase capacity and has ordered Energy Secretary Jennifer Granholm to meet with oil executives to find ways to ease the pain on Americans. But White House criticism of big oil is more a ‘go-to’ action—from either party—when gas prices start climbing and profits soar. But complaining, even from the highest levels, usually goes unheard.
“I think like any company,” said Padilla, “they’re (big oil) trying to maximize profits and you have to assume they are not going to do anything. They’re not charities. They’re in business for a profit; maximum profit.”
Record high gas prices aren’t just an issue for work-a-day commuters who in a post-pandemic era are once again hitting the road and spiking demand. You’ll remember, It wasn’t that long ago during the darkest days of COVID when American roadways were sometimes only sparsely populated and demand for gasoline was flat.
“We’re returning to almost normal,” said Padilla. People are traveling, returning to their jobs and offices, said the MSU-D professor. Add to that, it’s summer, the season for family road trips; the season when tourism and the hospitality industry make a good chunk of their money. But the equation is skewered this year and gas is the variable that is now the predominant factor.
Colorado is also a state that counts on out-of-state and out-of-country visitors. Tourism, says the Colorado Office of Economic Development & International Trade, adds nearly $20 billion to the state’s economy and $1.2 billion in state and local taxes. But with gas now at an all-time high, the hospitality industry is bracing itself for a slowdown.
“Gas prices,” said Silverthorne customer service worker Norwood Price, are having an impact. Only an hour away from Denver, visitor levels in Silverthorne, he said, seem thinner than normal for this time of year. “It’s gas prices, inflation…families are just trying to survive.”
The one-two punch of gas prices and inflation, also at a decades-high level, are threatening to squeeze summer profits. Silverthorne, a place that attracts visitors with its factory outlet stores, may be in a better place than the state’s high-end stops. It’s a day trip from Denver. But places like Aspen, Steamboat Springs and Vail where an overnight stay can start at $250 may be in for a wake-up call this summer.
Colorado, like the rest of the nation, may not be used to five-dollar a gallon gas. But we’re still in a better place than parts of California where pump prices in the most populated areas have already hit the seven-dollar mark. We’re also far better off than people stopping for gas at Central California’s newest tourist stop, Schlafer’s Gas and Auto Repair in Mendocino. At the end of last week, pump prices there were spiking at $9.63 a gallon.
