Prop 23 Update: Current Gas Prices a Test Run for Cap and Trade – The Impact?
10/09/2012 1 Comment
If you think that gas prices are high now wait until AB-32 Cap and Trade kicks in, starting in January 2013.
Wayne Lusvardi writing at the CalWatchDog has some details:
Under Cap and Trade, gas prices are expected to increase from $0.26 to $1.61 per gallon. One study concluded that, if all the provisions of Cap and Trade were loaded into the price of gasoline, it would reflect about a $2.70 per gallon gasoline price increase above prices as they were before the current surge. In other words, California’s current gas price bump may be a pimple of what is to come in three months when Cap and Trade kicks in on Jan. 1.
Average gasoline prices in California shot up 50 cents per gallon in the last two weeks from $4.11 to $4.61 per gallon, according Reuters. The price difference between Jackson, Miss. at $3.43 per gallon and California at $4.61 was $1.18 higher. That’s about a 34 percent price spread. Many independent gas stations were reportedly shutting down — not because of lack of supply of gas, but due to the jump in price that reduced profit margins to zero.
The question is what will be the long term impact on the local economy as fuel, gas and diesel, prices stay well above $4.00 a gallon? Potential tourist income will not be going up to compensate for higher fuel prices. Their budget are being challenges by higher food prices due to increased transportation and agricultural costs. All these cost increases will result in less disposable income. Income familes might invest in a day or vacation trip to Nevada County. Some families will be making the choice between food or fuel. Those decisions will impact our local economy.