MAY
08

gas_prices.jpgGas Prices Killing Travel

As gas prices rise, people start feeling the pinch at the pumps. In Ottawa, the gas prices have been as high as $1.25 a litre with no signs of relief, and so many commuters are not spending any more time than they have to driving their car from point A to point B.

According to CNN, high gas prices are causing financial stress for seven out of ten Americans, and I would not be surprised if just as many Canadians are effected.

High gas prices lower tourism, and shopping at brick and mortar stores. People are driving less, cutting short vacations and trying to find other ways to save fuel.

"The U.S. economy is growing quickly, China is growing quickly and other countries are doing better -- demand has gone up," said Phillip Swagel, an energy analyst at the American Enterprise Institute.

Analysts blame the higher prices on a tight worldwide supply, unstable politics in oil-producing countries, an inadequate number of U.S. refineries and delays in the U.S. in switching over to summer blends of fuel.

Whatever the reasons, soaring gas prices are affecting people's behavior.

Two-thirds of those surveyed said they have cut back on driving and have reduced the use of heating and air conditioning. One-half say they have trimmed vacation plans.

It should be interesting to see how things play out over the next year or two. Many were hoping that over a dollar a litre gas prices would be short lived, and not come back for a long time, but unfortunately, too fast for most people, we are back to digging deep in our pockets to decide if we can go to the store, or if it will have to wait until later.

Will new technology come and save our wallets? Will the government intervene? People are hoping for some relief, any relief.

Gas prices have drivers fuming [CNN]

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