Grabbing a bite to eat for lunch or putting gas in his six cylinder 1998 Explorer in order to get to school is something Benny Guzman, anthropology major, had to contemplate upon realizing that he only had $7 to spend.
Gasoline prices have now reached a record of $4 a gallon.
“I don’t have as much money at my disposal as I did before the gas prices increased,” Guzman said. “Most of my budget is going to the gas pump.”
The current prices are attributed to supply and demand factors, in particular, low gasoline refining capacity in the United States.
In addition, there is an increasing world demand, especially in rapidlly growing countries like India and China.
Other reasons for the high gas prices include ongoing geopolitical tensions, investors worried about inflation and the weak dollar.
“The high gas prices pose a significant challenge for the economy,” Tanja Carter, economics professor, said.
It is difficult for commuters to reduce purchases of gasoline significantly in the short term.
Of course, higher expenditures on gasoline means consumers have less money available to spend on other goods and services.
“I am not going out as much as I used to,” Claudia Avitia, business major, said. “Especially if I have to come to campus twice in the same day.”
Avitia commutes from Lynwood to campus five days a week. She drives a Toyota Highlander, a six cylinder vehicle, and she’s spending approximately $120 a week at the pump.
“It’s a very difficult time because not everyone can afford to pump gas in their car every day,” Avitia said. “I don’t have a choice because I have to pick up my children from school. Public transportation is not an alternative for me.”
Reports indicate that oil inventory levels have actually increased.
Usually this would signal a potential decline in the price of gasoline.
However, the weak dollar makes speculative investment in a dollar-denominated commodity, such as oil, more attractive to foreign investors.
“I usually see some students pumping gas, but when the prices increased, I haven’t seen as many,” Martha Barrintos, cashier at Thrifty gas station on the corner of Prarie Avenue and Redondo Beach Boulevard, said.
When students do come, they only purchase about $1 or $2 in gas to get where they have to go.
“High gas prices are necessary to reduce demand,” Michael Brennan, biology professor, said. “If resource scarcity is the primary cause, high prices will reduce consumption, which will result in an increase in inventory.”
According to the L.A. Times, high prices will also cut down on greenhouse gas emissions more effectively and more immediately than any government program short of fully enforced rationing.
The L.A. Times also explains that as California switches from a winter gasoline blend to a smog-reducing summer blend in May, upward pressure on prices could increase.
Summer gasoline blends cost only slightly more to process, but sometimes refiners will draw down winter blend gasoline levels before supplying the summer blend, temporarily increasing prices.
“I used to drive to the San Fernando Valley every weekend but I’ve had to cut that down to twice a month,” Guzman said. “I have to ration the gas in my tank.”
