Just back from the States, the hottest topic there is on Gas (Gasoline aka Petrol) Prices. Looks like it is hotter than the Iraq war or the possible Iran war. Why is it so important? We have been living with very high petrol prices for very long now, so why is it so important for the Americans now?
The special thing is that they have always had cheap gas. As far as I can remember, we have been paying around $4 per gallon of petrol (Gallon =3.8 liters and rough currency conversion). But around 5 years ago, gas was as low as $2 per gallon in US. So the whole US economy is built on cheap gas prices. People have gas guzzling cars, there is literally no public transport (except in downtown), and nobody has planned to conserve gas.
While we look at fuel economy when buying cars (10-12 Kms/liter) in India, in the US people look at how big the car is and how powerful the engine is (10-12 miles/gallon). So gas at $3.5 (when I left) is a shock. People go to office traveling up to 50 miles on cars and suddenly their travel bill has gone up by several notches. With almost non-existent public transport (this is where Europe differs, they seem to have extensive public transport and so people do have an alternative to cars), there is no alternative for people to look at. So now there is a big hue and cry about hybrids (we don’t have any in India, which is a shame) and about economical cars. This was the first time I saw a car Ad in TV that talked about fuel economy of the car. :)
So what are the alternatives now? Not many though. First that is being looked into is ethanol alternatives and Hybrids (also fuel cells). But it is going to take them quite a few years for these to become so widely prevalent that the cost of petrol can come down.
In the short term it looks like costly gas and a lot of heartburns for the US and everywhere else.
