Now even official economists are talking $2 a gallon gasoline

I still might win my $10 bet.

Last Sept. 15, as the price of gasoline soared close to $3 a gallon in the post-Hurricane Katrina hysteria, I bet a friend that the price would be down to $2 a gallon again within three years.

“No, it will never been below $2 again,” this friend said. “They know they can charge $3. Why should they ever drop prices?”

Falling fast? Well, here in eastern Pennsylvania, gasoline prices remain at the level they were right after Katrina. But the price was 15 to 20 cents higher just a few weeks ago, so now the economists are saying it could fall a lot more.

“We’ll be closer to $2 than $3 come Thanksgiving,” says Fred Rozell, gasoline analyst at the Oil Price Information Service.

Gas at $2 a gallon, a turkey dinner and a free $10 bill. It can’t happen soon enough.

Frank Warner

Comments

[klonower]

$2.43/ga. and counting here in Texas

[Frank Warner]

That's a good price. The lowest I've seen around here so far is $2.63 a gallon. I'm sure it's a little lower in places.

[jj mollo]

Mallory is seeing lower prices, but she's not completely happy about it.

[Frank Warner]

It's about $2.37 a gallon around here.

But keep calm. Prices are supposed to change from time to time.

In economics, every price is a two-edged sword. Yes, a higher gasoline price discourages us from consuming too much gas. But on the other hand, a higher gas price encourages oil companies to find for more oil, and until the world really is out of the stuff, every new discovery temporarily will reduce the price again. With a lower price, demand will rise again.

The energy price trend appears to be upward. That also is an incentive to find alternatives.

So don't fret every time the price changes. Goes up. Oh no, I'm broke! Goes down. Oh no, the world's over. Try to go with the flow.

And if you want cleaner energy now, demand it. Tell everyone in power.