Students Feel Bite of Gas Hikes

With gasoline prices on the rise nationwide, averaging at about $3.25 a gallon, many students are starting to feel the blunt reality of an energy crisis.

As the price of crude oil rises to more than $70 a gallon the law of supply and demand is reeling its nasty head around, forcing consumers to empty their pockets, while the oil industry’s coffers are bursting at the seams.

The Associated Press reported that the country’s three largest oil companies — Exxon Mobil, Chevron and ConocoPhillips are expected to report more than $16 billion in profits during the first quarter of this year. Exxon Mobil earned $36 billion last year, the most ever by a U.S. company.

With gas prices reaching nearly $4 a gallon in some parts of country, breaking records pervious set when Hurricane Katrina disrupted gas production last summer, the public is looking for some quick solutions.

Perhaps the hardest hit by the record-breaking prices are students, whose budgets are strained by the cost of gas.

Dan Kelsey, 19, a GCC English major is starting to find his wallet a little lighter these days.

“Gas prices are ridiculous, almost $4 a gallon, that’s not right,” said Kelsey. “The gas price has already jumped 10 cents in the last two weeks. I drive an old Chevy Blazer, so I get the worst gas mileage ever and I’m always out of money.”

Gregory Miles, 24, a bio-engineering major simply said, “It costs more than usual to fill up my tank.”

Even students who do not drive are starting to feel the sting.

Zach James, 19, a music major, does not own a car but still is haunted by the soaring prices. “Since I don’t drive, some of my friends who lend the courtesy of giving me ride places are starting to ask me if I could help them with the cost of gas.”

Some students rather not deal with the issue, as the case with biology major, David Castillo, 19. “I rather just buy a MTA day pass for $3 rather than a gallon of gas.”

In March the average price of regular unleaded was $2.43 a gallon. When the price per gallon is broken down, 55 percent for the price of crude oil, 22 percent to refining, 19 percent to taxes and 4 percent for distribution and marketing, according to Doug Beach of National Public Radio.

Gasbuddy.com listed a Chevron station in East Los Angeles charging $3.62 for a gallon of regular unleaded on May 1, a jump of a $1.19 from last month.

As the blame game starts over the cost of gas, many are pointing their fingers directly at the gas industry; some blame the war in Iraq, while others plan to add another item on the president’s list of blunders.

“The gas companies are to blame,” said Miles. “Unless more car manufacturers want to make fuel alternative cars that run on other than gas.”

In 2005, registration of new hybrid vehicles rose to 199,148, a 139 percent increase from 2004. Hybrids now account for just over 1 percent of all vehicles sold in the U.S. Toyota is planning to release a hybrid version of the Camry this summer. Right now, the Camry is the best-selling car in the U.S., according to the Associated Press.

“I think prices are ridiculously high right now, obviously they are a direct result of the war in Iraq,” said Vart Kriourktzian, 19, major undecided. “I think there is no real explanation other than the war and now tax payers have to pay more than they should be.”

In January 2004, prior to the U.S. led invasion, Iraq produced 2.5 million gallons of oil per day. After the invasion the production level fell to 2.3 million barrels per day in 2004. As of January of this year production fell to 1.6 million barrels daily, according to National Public Radio’s Scott Horsley

Many feel that the full blame falls on the head of state. “The president is to blame for the gas prices,” said biology major Diego Rodriguez, 21.

As the Republican Party fails to offer voters any short term fix, a proposal by top Republican senators to offer a one-time $100 gas rebate was seen as a token gimmick by the Democratic Party.

On the Democratic side, Senate Minority Leader Harry Reid of Nevada said: “For five years, this administration has let oil companies write America’s energy policies.

“Now, as the American people are punished at gas stations for failures in the White House, Bush Republicans are offering more giveaways to Big Oil.”

Republicans had voted three times to block action on anti-gouging legislation sponsored by Rep. Bart Stupak, D-Mich.,” said House Minority Leader Nancy Pelosi, D-Calif.

“Instead of the record prices for gas and record profits for Big Oil, we could already have had laws on the books against gouging and excess profits,” said Pelosi. “But the Republican energy policy has been about massive subsidies for oil companies already making historic and obscene profits and nothing for the American consumer.”

With the public screaming bloody murder, some are looking to Washington for some much needed support.

The Arizona Star reports that some members of Congress want to reinstate the windfall profit tax on the oil industry, which was used during the 1980s to help promote fuel efficiency and renewable energy through taxes and tax credits.

Other Republican congressional members want to temporarily repeal the 18.4 cents-a-gallon federal gas tax. Sen. Mel Martinez, R-Fla., told the Associated Press the tax break would offer “immediate relief” of about $100 million a day to motorists.

This temporally tax repeal could help students, such as Papken Nalbandian, 21, a bio-chemistry major, who has to now cut back on his spending and said “My budget is now more focused on gas than other things.”

President Bush has recently taken small steps to help prevent a summer gas shortage, called for more research on fuel alternatives and promised to crack down on price gouging.

According to Horsley, the president has asked that 12 million barrels of oil destined for the U.S. Strategic Petroleum Reserve be left on the open market to help ease supply and demand. This is less than the U.S. consumes in a single day, according to economist Sevrin Borestine of The UC Energy Institute.

Bush also wants more incentives available for buying fuel-efficient hybrid vehicles and further research conducted on the use of corn-based ethanol.

Many environmentalists hope to use Brazil as an energy example. Oil makes up only 30 percent of Brazil’s energy use and the country pioneered the use of ethanol, according to NPR.

Bush hopes tax credits and benefits like allowing hybrid drivers to use special high-occupancy highway lanes will help bring down the demand on oil.

Many insist on the need for more hybrid vehicles and alternative fuels. “I think a lot of these fuel problems can be solved by switching to alternative fuels such as ethanol, or by mass producing electric cars,” said James.

The president has also asked The Justice Department and The Federal Trade Commission to investigate the recent price hike as he recently said in his address to the nation, according to NPR.

“Americans understand by in large the price of crude oil is going up and the gas price is going up, but what they won’t accept is price gouging,” said Bush.

Even with the investigations, many are still skeptical of the oil industry, “Gas companies are making way too much money and are taking advantage of the situation,” said Nalbandian. “Their percentage of gain is insane.”

With the peak summer driving season looming over the horizon, the demand on crude oil is foreseen to rise and with it also gas prices.

GCC Economics Professor Mark Maier sees no real short-term answer for drivers.

“When you look at the short and long-term effects on gas prices, it’s 50/50,” said Maier. “On the long term, prices will continue to stay at about $3 a gallon, just due to global demand.”

“On the short term, the price can rise or drop, depending on the demand this summer. Gas prices can rise another 20 to 30 cents just based on demand.”

As the public begins to hunker down for an all-out gas war, some are not bothered the least bit.

“Gas prices are good in the U.S. compared to Sweden, where gas is $6 a gallon,” said Rveo Viglriaian, 25, a computer science major from Sweden. “So for me it’s not a big deal. I’m used to it.”