Rides : Fuel economy target of 54.5 mpg set by Obama

American President Barrack Obama has proposed doubling the corporate average fuel economy standards to 54.5 mpg by 2025.

Being flanked by the import-brand auto makers and chiefs of the United States, President Obama’s announcement will affect mileage standards for light trucks, which will increase by 3.5 percent a year from 2017 – 2021.
Obama’s proposal is representing one of the biggest hikes in fuel-efficiency goals since 1970s, when the Government created fuel-economy standards in order to reduce its dependence on foreign oil.

“This agreement on fuel standards represents the single most important step we have taken as a nation to reduce our dependence on foreign oil. By 2025 the average fuel economy of vehicles will almost double to 55 mpg. This is an incredible commitment that they (automakers) have made. They wouldn’t be doing it if they didn’t think it was good for business and good for America”, said President Obama.

The tougher fuel economy has been vigorously opposed by automakers in the past who said that people would not pay more the technology required to meet higher standards.
Alan Mulally from Ford, Dan Akerson from GM, Sergio Marchionne from Chrysler and UAW President Bob King were at the event. They were joined by leaders from BMW, Toyota, Nissan, Mitsubishi, Mazda, Kia, Land Rover, Hyundai and Honda.

Economics : The average U.S. price of a gallon of gasoline has jumped about 12 cents over the last two weeks, and in Hawaii the average price for a gallon is $4.5!

Drivers are fed up and don’t know what to do. The national average was $3.88, as of Friday.

A frustrated Rama Dahdouh said she is not going anywhere.

“I’m staying home. You can’t go anywhere now. Just basic where ever you go.”

AAA reported the average price of a gallon of regular gas in Chicago was $4.245 Monday, up 3.5 cents from a week ago.

Procter & Gamble Co. said Monday it raised U.S. list prices for those paper products because of rising costs for oil, gas and pulp.

The Cincinnati-based consumer products maker informed retailers of increases last week. Retailers will decide how much of those price increases to pass along to shoppers.

The Obama administration, reacting to higher prices (rather than being proactive about decreasing America’s energy independence), is calling for a probe of gasoline prices.

Sen. Richard Blumenthal, D-Connecticut, renewed his call for a federal investigation to determine if illegal speculation and trading are driving the skyrocketing increase in gasoline prices.

Blumenthal told moderator Bob Schieffer on the CBS television program “Face the Nation” Sunday, “There really needs to be an investigation involving… subpoenas and compulsory process. There needs to be very possibly a grand jury to uncover the potential wrongdoing.

“The Justice Department should take the lead, seize this moment, and send a message — a very strong deterrent message — that this country will not tolerate the kind of illegal speculation and trading and hedge fund activity that may be driving prices up.”

Current levels of global demand for oil would buffer the impacts of Japan’s nuclear crisis on Kuwait, according to Abdelatif Al-Houti, Kuwait Petroleum Corp. (KPC) managing director for world marketing.

Al-Houti told state media that the protests and unrest in Libya, as well as in Bahrain, have led to high oil prices, but that the crisis in Japan has created some price balance due to its reduced consumption of oil.

However, the prices of oil and gas products, especially auto fuel, will skyrocket due to the stoppage of several world oil refineries for maintenance, said Al-Houti, who added that Kuwait sells only to end users and not to speculators.

So … the $5 per gallon is very close!

Economics : With the recent conflicts in the Middle East and North Africa, gas prices have hit an ominous milestone.

Since the turmoil in Libya broke out in mid-February, the price of crude oil has jumped roughly 20% to more than 104 dollars a barrel, pushing up prices at the pump as well.
In some areas, gas prices are as high as four dollars! Problem is that according to the International Energy Agency, Libya has halted between 850,000 and 1.0 million barrels per day (bpd) of the country’s total of 1.6 million bpd. But if turmoil and instability will continue, Libya may halt the entire production.
The jump was the biggest since a 38-cent hike between August and September 2005. At the time, the price increase was driven by damage caused by Hurricane Katrina. Analysts say prices of $4 a gallon could have some serious implications including the further slowdown of economic recovery. A gas record price of $4.11 a gallon was achieved on July 17, 2008.
Unfortunately, with the increased tensions in the Middle East, China’s growing oil consumption and the impending arrival of the summer driving season, gas prices are not likely to abate any time soon.
According to Reuters, the U.S. government reiterated that it could tap its strategic oil reserves to safeguard economic growth.

Tapping into the oil reserve “has been done on very rare occasions,” Daley said on NBC’s “Meet the Press.”

“There are a bunch of factors that have to be looked at, and it’s not just the price,” he said.
“We’re looking at the options,” including drawing on the Strategic Petroleum Reserve, Chief of Staff William Daley said. “It is something that only is done — and has been done — in very rare occasions. There’s a bunch of factors that have to be looked at.”

The 727-million-barrel U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned oil in the world. It was established after the 1973-74 shortage created by the Organization of Petroleum Exporting Countries cut off oil over U.S. support for Israel in the Yom-Kippur War.
Oil analysts expect prices to peak at $3.75 by the end of the year.