Higher Gas Prices Bad News for Commuters

If you read the comments to various housing blogs, you'll notice many predictions of across-the-board price declines of 30% or more, but I don't think it's that simple.

According to an LA Times story, Californians should expect gas price approaching $4.00 per gallon in 2008 (Happy New Year!):

"If anyone expects gas to be less than a new record, they are not thinking," said Fadel Gheit, senior energy analyst for Oppenheimer & Co. "There is no question it will be much higher than last year."

Americans will start 2008 paying about 65 cents more a gallon than they did in January 2007, according to the forecasts, and by April could see self-serve regular selling for $3.50 to $3.75 a gallon.

In California -- where gas this year has fetched as much as 50 cents more than the national average -- $4 a gallon "will no longer be considered a rogue number," said Tom Kloza, chief oil analyst for the Oil Price Information Service. "It will list for that much in a lot of places."

So what does that mean for far-flung areas with poor public transit options and requiring a long (and increasingly expensive) commute? Probably larger price declines than in areas which are within walking distance of various MTA lines or require shorter commutes. For example, I'd expect sellers to offer greater discounts in Palmdale than in North Hollywood, but only time will tell.

Perhaps next time politicians try to float a sales tax increase to fund public transit options in certain counties in which they've been voted down, voters will take it more seriously.