Gasoline Price May Drop To $1 Per Gallon, Auto Industry To Stop Manufacturing High-Mileage Vehicles?
Good news or bad? A mixture of both? Reports suggest that gasoline prices may drop, and the price may be as low as $1 per gallon. For vehicle owners, this is good news, right? But low gas prices mean losses for many. To compensate for the loss, will the auto industry stop manufacturing high-mileage vehicles?Advertisement
There are chances that high-tech vehicles that offer good mileage may not continue to be manufactured if prices of gasoline continue to drop. But why is gasoline price dropping every day? According to a report published on USA Today, “Gasoline prices are driven mostly by four factors: oil prices, proximity to refineries, refinery capacity and state taxes and levies. Oil prices have dropped below $33 a barrel and continue to collapse.”
The article further says that “The recent decision by Saudi Arabia to continue to keep its oil exports high essentially has dissolved the OPEC cartel. The decision also has forced the kingdom to chop its 2016 budget. This ongoing supply glut guarantees oversupply of crude.” Gasoline prices may witness this new low only in some areas of the U.S.
According to AAA, the average gasoline prices in the U.S. is $1.96 per gallon, as reported by Forbes. The country is said to have not seen a drastic drop in prices after 1999. If the prices of gas in U.S. really drops to $1, the only way for everyone in the fuel industry to increase the income is by requesting the auto industry not to manufacture high-mileage vehicles. And if auto-makers fall prey to the pressure, gas prices may affect the mileage.
But still, it won’t burn a hole in our pocket. Yes, you may have to spend $2 instead of $1, but it will not affect your budget as much as it may affect the ones involved in the gas industry.
To get the latest stories in your email, you can also subscribe to our newsletter. If you are a social media junkie and would like to see our stories on your timeline, then like us on Facebook, or follow on Twitter.