First, let’s give a big shout out to Pendejoe Biden and the Democrats for the massive achievement at the gas pump this week. Nobody thought Pendejoe and the Democrats could create record gas prices in just over a year of having complete control of Washington, but they did it. They deserve all the credit. Not only were they able to accomplish this on their own, but they also were able to do it with the Republicans standing in their way, trying to keep gas prices down. We’ll definitely put it down as a win for Biden as he clearly set his goal on record high gas prices. Still, you can’t accomplish something so amazingly bad without a strong loyal team of Democrats who helped fight for extremely high gas prices.
The previous record for RBOB was $3.41 set back in June of 2008. That record was broken March 2, 2022 when RBOB climbed to $3.52. At the close on Friday, Rbob reached yet another high and closed at $3.52 for the weekend. For the latest rbob price, click here. What makes RBOB so significant is that it pretty much tells you what the gas of price will be at the pump. In Louisiana, the state taxes are 20 cents a gallon, all states pay an addition 18.4 cents a gallon for federal taxes, and of course the store selling you the gas has a small markup, usually 7-10 cents/gallon. So, if you’re in Louisiana or one of the states with a low state gas tax, you will see gas at least $4.00 a gallon by next week if not already. Some of you pumped up today and got sticker shocked over the rapidly increasing prices. In fact, since the last day of February, RBOB has jumped up 72 cents.
At $4 a gallon people will be spending anywhere from $50 to $152 for a tank of gas. Depending on how much they drive, that could easily sink some household budgets. But even if a family is filling up one car once a week, that’s still $200 at least coming out of their monthly budgets. For others- some who fill up everyday – their gas budget is running over $1000 a month. Even if they are earning $5,000/month, 20% coming out of their budget is still noticeable. While that earner could afford it, most people aren’t bringing in that much. This is the your average sales agents, gig economy (food delivery, Uber), other jobs where one is required to drive a lot. (As a side note, if you have signs in your yard proudly displaying what you are, you probably should make it a point to tip. If you’re going to represent a group of people, represent that group well).
This will translate to other areas of people’s lives. Going out to eat becomes affected causing restaurants to spend less labor hours. Vacations become more budgeted or nixed. Earnings for companies and their employees will necessarily decline whether through labor hour cuts or layoffs.
Oil impacts our lives in far greater ways than just gasoline. Anything plastic comes from oil. Cellphones, computers, kitchenware, bags that hold food in grocery stores, and sports equipment. Oil is so ingrained in our lives that it’s not just the cost of shipping goods that necessarily increases but also the cost of goods we consume that comes from oil that will also increases the price. In 2008, RBOB set its previous all time high in June at $3.41, five months later it sunk down to $1.24. The upside is that crude in 2008 had reached $140/barrel while Friday was still sitting at $115 current price. This means that all the other products that we get from oil won’t be as expensive as it was in 2008. However, Sunday night’s open has crude becoming more reflective of its 2008 highs.
And the February jobs number was released and while the number was great, our job market remains short by 1.14 million from pre-pandemic high. But while people are returning to work one has to wonder how the rising prices are affecting the workforce. Are many of these workers taking on secondary jobs to help fight inflation? If this is the case, these are people who aren’t celebrating the increase in jobs numbers. These are people forced to spend less leisure time with their family and friends. Statistics don’t matter to people who are struggling. If people are filling up the part time jobs to avoid their own budgetary crisis, then we may well see the markets begin to implode soon.
The reality is, all products are elastic and while gas may be more inelastic than most products, it does have a price breaking point. I don’t believe $4.00 a gallon of gas is sustainable and will break the economy. Unfortunately there is reason to believe that gas prices will continue to increase into the summer as is the tradition of gas prices. Regardless of if it levels out at $4.00 or continues to increase into greater than $5.00, it will necessarily have it’s negative impact on our economy. All products have a price point that it can no longer be sold.
At this point there is no reason to continue to purchase Russian Oil. The Democrat party is going to feel the wrath of the average American worker throughout 2022 anyway, you might as well go all in against Putin.
Unfortunately, our economy cannot continue the strain of record high gas prices. While Pendejoe and the Democrats love forcing gas prices up in order to make green energy seem more affordable, it always backfires on the Democrats. Whether Jimmy Carter in the 70’s, Paul “tax on gas” Tsongas in the 80s, or Pendejoe today, pushing the average American into their financial breaking point isn’t going to force them into buying green energy. What will happen is they will become very educated in what is causing gas prices to skyrocket the finger points squarely to the Democrats.
Oh, and just the latest on RBOB, Sunday night when the markets opened, RBOB climbed to $3.89 before scaling back down. That’s a $1.00 jump is just 6 days. If that holds true, the cheapest gas anywhere in the US at pump will be at least $4.50 before the end of the week. Like Antoine Dodson would say, “Hide yo kids, hide yo wife, and hide yo wallet too because Pendejoe’s gas prices are snatching yo people up.”