Tag Archives: fuel prices

Time to put-up or shut-up on fuel prices

On holidays with my daughter in California recently, we caught the Amtrak train from Merced to San Francisco. During one of the all-too frequent stoppages we struck up a conversation with Brian and Jean, a couple who were on their yearly holidays and who were two of the few Americans who take a train at holiday time. Brian was an executive for Amtrak, which meant he only paid a fraction of the fare anywhere in the States; a good reason to travel by train in anyone’s language.

 Now besides the obvious topics like ‘Why does the train stop for long periods for no apparent reason” and “will the Democrats win the election”, we spent quite a while talking about the nature of wealth in America. The bottom line according to this couple was that if Americans could buy a mid-range four-wheel drive plus afford the gas to run it, they felt wealthy. It didn’t really matter about education, health or real estate. The main criteria, the one that mattered in the hearts and minds of Middle America, was the good old gas-guzzler.

 The recent local outcry on the price of fuel indicates that we also see cars and the ability to run them as more than just a transport imperative. Yet there’s a major difference between our American friends and us here in the luckiest country. We have a public transport system and they don’t. Simple. We have a car alternative, whereas they are largely car-dependent due to necessity.

 Catching a bus between suburbs in LA is harder than buying a good coffee anywhere in the States. Sure, there’s the New York subway and the San Francisco trams, but other than the few icon systems in the major cities, America’s public transport system is old fashioned and predominantly used by school children. It’s pretty crook.

 So why is there suddenly a public outcry about fuel prices when we could actually save many dollars and a great deal of stress by jumping on a bus, train or tram. The answer is that for us, like for our US buddies, the motorcar has become less a functional tool and more a symbol not only of our wealth, but of our personal freedom and sense of control.

 Our obsession with individual freedom means that we choose the splendid isolation of our motorcar rather than having to share a seat with someone on public transport. How yucky! Taking public transport means succumbing to the often unpredictable hiccups that impact on the smooth running of any system. All systems at times catch a cold. There’s always the possibility of breakdowns, vandalism, buckled lines, flat tires and those terribly thoughtless people who fall onto railway tracks.

 Rather than place ourselves in an imperfect system where our hard fought sense of control is threatened, we choose the car…the perfect icon of air-conditioned, GPS assisted freedom.

 Yet this control comes at a price, and as we’re experiencing lately, this price is the ever-increasing cost of a litre of fuel. Americans are discovering as their fuel costs bite, that the price of freedom is never stable. As they begin to lose the sense of control that filling up the V8 provides, some may realise that any sense of freedom based on a piece of metal or a market commodity is a fragile sense of freedom indeed.

 The strange thing is that the theory of supply and demand states that the less fuel we buy, the more likely it is that the price will go down. Yep, that’s right, the classic price model tells us that should we somehow manage to leave our symbols of independence in the garage more often in order to brave the imperfections of public transport, the price of fuel would plummet. What’s more, due to public transport largely being government controlled, the same model won’t apply in reverse. Ticket prices won’t rise with demand…or so the theory goes.

 So the answer really is very simple. Either we shut up and happily pay the escalating price of fuel in order to maintain our fragile sense of control, or we shut up and embrace our public transport system…a system that like all of us catches a cold sometimes. Unlike our US cousins, at least we have a choice.