On Oil Prices, Cars and Scooters

Uncategorized  by Atul Acharya at 9:38 pm No Comments »

You know the oil price crisis is hurting when even commuters in Los Angeles are starting to take the subway. Los Angeles, that urban prawl, which is “fifty-two suburbs in search of a city”, is hardly a commuter’s dream. Freeways criss-cross freely in and around the city while commuters sit in parking lots, waiting endlessly to get to their destination. Having lived in one of its suburbs a decade ago, without the ubiquitous car and commuted to work, I have seen first hand the mess called urban traffic. LA — the City of Light, the land of the “Ventura Highway”, the city that gave the world smog, and the city that used to have a 1000-miles of subway tracks — is hardly a city to live in without a car. Public transport is almost non-existent, and where it exists, it doesn’t go where you want to go, as the BBC reporter found out. So it is indeed ironic when commuters in Los Angeles start taking the subway.



Of course, this is all related to the oil price at the gas stations. Crude oil price topped $135 per barrel today, and have been on a roll since early this year, and especially since the analysts on the Street predicted $200/barrel by the end of the year.
The causes of this meteoric rise in oil prices aren’t unknown. In fact, they are all around us. The big fat SUVs, the measely 10-15 mpgs vehicles and the quaintly American penchant of driving 5 minutes to grocery stores, gyms and banks all add their 2 cents worths to come up to $100 and beyond. A BBC chart shows how oil got to $100/barrel in the first place.

Oil Price

If you are looking for gas prices at the station across the US, this map (via GasBuddy.com) is helpful.
US Oil Prices by County

Of course, this is old familiar “arm, leg and a first born” refrain.


[via National Geographic]
Citizens of Europe would perhaps happily give their arm and leg for a rate as cheap as $4/gallon.

So what’s an average commuter to do?
As both NY Times and Wall Street Journal reported, commuters are heading to scooter dealers in hopes of finding the 60-80 miles per gallon alternative: that old, humble, even humorous relic of the WWII era - the scooter.

NYT has a good review of the Vespa S, the old style 150cc version.

Vespa S
[via NY Times]

The Wall Street Journal goes one step further. It compares the cost of ownership
(well, the cost of fuel, mainly) of a Vespa, a Honda Accord and a large SUV. See here:

Vespa vs. Accord vs. SUV

Meanwhile, in the other part of the world, the Indian car market is booming. Indian market analysts are “jubilant” over the fact that now India is the fastest growing passenger car market, per Automobile India.
India Car Production
I find it mildly ironic that in the United States, the land of the plenty, the land of the free and free trade, this idea of a small, personal fuel-efficient vehicle, nay, scooter, may actually be taking root. Having driven one for almost 10 years in India where scooters sometimes seem to outnumber people, and where the vastly growing middle-class and the burgeoning noveau riche are now spending their millions of dollars and rupees on premium and luxury cars, while also eagerly awaiting the $2,500 Tata Nano, it does indeed sound a bit ironic.

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