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Since 2005, American gas prices have effected where people spent their vacations. Historically, the prices at the pump leap during holidays and summer. The oil and gas industry called this supply and demand. With Katrina’s effect on the coastal refineries and war, the American consumer finally dug his heels in and said, “no more.”
The Downsizing of the American Car
The energy sector’s game of cat and mouse lost it’s edge when the car companies found themselves with an overstock of gas guzzling SUVs. If gas prices were going to stay high, than Americans were going to buy small. The small, fuel-efficient auto was back in fashion. It was fun, youthful and cool to drive. Only a fool would continue to drive a rolling fuel monster.
Many people stopped buying new cars, too. Some cars, like the Honda Civic, proved to hold its value because it was well made and it was fuel-efficient. A used Civic made a lot of sense to the traveling public.
The Domino Effect Took a Bounce
If gas prices were too high, then people simply didn’t take big trips. Hotels lost revenue, theme parks lost revenue, airlines priced themselves out of business. What the fuel and transportation industry failed to recognize was the kitchen table economics of working families. People simply refused to pay the high gas prices. When multiple industries started to suffer, the oil and gas guys weren’t very popular.
People Don’t Buy the Scare Tactics Anymore
Even though Libya is fighting over oil, and Egypt is in revolution, and the Gulf is full of dirty, oily water, people aren’t buying those things as a reason to raise gas prices anymore. Therefore, prices have been surprisingly stable this summer.
