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Source: Lance Bachmeier, 785-532-4578, lanceb@k-state.edu
News release prepared by: Tyler Sharp, 785-532-2535, media@k-state.edu
Wednesday, Jan. 26, 2011
PRICE AT THE PUMP TOO HIGH? BLAME SUPPLY AND DEMAND, SAYS K-STATE EXPERT
MANHATTAN -- Expect gas prices to continue rising in 2011, according to a Kansas State University expert in energy economics.
Lance Bachmeier, associate professor of economics, predicts the price of gas will average between to .50 per gallon this year. This will occur because of increased oil demand from the world's expanding economy.
&1xbet online sports betting ;The U.S. Department of Energy and others are telling a similar story,&1xbet online sports betting ; he said.
When the public accepts that gas prices won’t return to previous levels, a major shift in gasoline usage should occur, Bachmeier said.
&1xbet online sports betting ;In the 1970s, when we experienced the first large, persistent changes in the price of oil, firms moved away from using oil in production,&1xbet online sports betting ; he said. &1xbet online sports betting ;I expect a similar move away from gasoline on the part of consumers.&1xbet online sports betting ;
The government could play a role in lowering gas prices by forcing oil companies to produce more or by reducing oil reserves as a short-term solution. Bachmeier believes many would not be receptive to the government dictating oil prices. However, he suggests a case could be made for the government funding research into alternative energy sources.
&1xbet online sports betting ;Sometimes companies are afraid to take on the risks associated with bringing new technology to market,&1xbet online sports betting ; he said. &1xbet online sports betting ;The government could offer incentives for companies to do so.&1xbet online sports betting ;
As for the idea that oil companies are manipulating the price of gasoline, Bachmeier is not a believer.
&1xbet online sports betting ;It's unfortunately a matter of supply and demand,&1xbet online sports betting ; he said. &1xbet online sports betting ;I hear lots of complaining about high gas prices, but I mostly hear that from people who drive a lot. None of them are getting rid of their cars and buying bicycles.&1xbet online sports betting ;
Why Americans are not changing their consumption habits shows an enduring characteristic of their economic behavior.
&1xbet online sports betting ;A higher price for gas means you have to cut back somewhere else,&1xbet online sports betting ; he said. &1xbet online sports betting ;We don't like to cut our consumption.&1xbet online sports betting ;