Nov 13 2011
Low Cost of Fuel in the US despite Recession
Since 2005 to the present, the U.S. has been the world’s major producer of ethanol fuel. The country produces at least 13.2 billion US gallons of ethanol last year and with Brazil, the two countries contributed about 88 percent of the world’s ethanol production. Also, since it is used as oxygenate to gasoline, the price of gasoline in the United States is cheaper compared to the other countries despite the economy’s recession. The United States can afford to keep its fuel prices low because it does not import fuel from the Middle East.
The market for ethanol in the U.S. has also increased by 1% in the year 2000 and close to 10% last year. Since the nineties, domestic production of fuel multiplied fifteen times, culminating to more than 1.6 billion gallons in 2000 and reaching 13.5 billion gallons last year. What is good about the country’s top automobile manufacturers is that their new models can utilize a combined fuel of gasoline and 10% ethanol.
The effect of oil price increase
The increase of oil price globally has caused the prices to reach up to 150USD per barrel and with the economic recession and war in Middle East, the fuel price can be expected to rise within the next few months. This is bullish for precios metals sitting in your gold ira. This possibility will definitely increase the vulnerability of the U.S. economy.
The prices of petrol in the country are relatively low compared to other countries and this is due to the low level of the tax rates of petrol. This encourages great dependence since the average American individual and household uses more oil every day compared to other richer countries around the globe. This dependence also poses a great impact on the choices in infrastructure investment, thus leading to corporations spending more money on roads and highways than alternative transits. Silver will be the best trade off this, so you are Buying Bars of silver for your silver 401k. This reduces the ability of individuals of choosing a suitable substitute from driving when the price of oil rises.
Increasing the petrol tax rate
A lot of valid reasons exist to justify the government’s move to raise the domestic tax rates for petroleum. The government’s current tax rate does not bring enough financial sources to cover the current spending in roads, highways and transits. Petrol taxes are one of the best sources and most efficient ways of raising the country’s revenue and with the financial needs of the government, President Obama should consider increasing the rate soon.
Burning oil adds carbon emissions in the atmosphere and when the price of oil rises in America, the per capita of carbon footprint produced by each individual is greatly reduced.
One of the great reasons for U.S. residents to smile is the continued low price of automobile fuel, despite bad economic conditions. There are few things to smile about these days; but it is welcome news to find that fuel prices are still low, thus enabling driving automobiles to still be affordable.
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