MSNBC and others are reporting that independent truckers around the country are driving slowly or just not running today in order to protest the high cost of diesel fuel.
I understand where they’re coming from - but I just don’t think that they’re going to have any effect other than to RAISE prices for the things that they are supposed to be hauling. Burried in the story is the comment that somebody somewhere is hoping that the protests will pressure the President to use the Strategic Oil Reserves to increase the amount of diesel for sale and lower prices…
There’s a few problems with the entire plan…
First, overall consumption of petroleum is only part of the issue. Yes global demand is extremely high and that is causing prices to be higher than they were just 4 years ago, but it’s not the only reason.
Oil is priced and sold in US dollars - and the value of the dollar is extremely low ($1US = 1.56 Euro and 1.97 GBP). Heck the US dollar is worth less than the Canadian dollar ($1US = $1.02 CAN). With the dollar being so weak it costs more to import goods into the US since our dollar doesn’t buy as much on the world markets… Oil from the Strategic Oil Reserves isn’t going to effect the poor buying power of the US dollar. The economists need to guide the Administration with crafting an economic policy that reverses all the issues that are causing the value of the dollar to plummet on the world markets.
Not only that - but back in the first years of the Bush Administration they actually went and released oil from the Strategic Oil Reserves in an attempt to lower gas prices… and it didn’t work! If it had any effect, prices moved a few pennies at most, not enough to make any real difference in the cost of fuel to us.
So just how are protests or even strikes by independent truckers going to force fuel prices to drop?
Or is it that with fewer trucks on the road, demand will drop, causing supplies to rise and prices to lower?
