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Examining the true costs of record fuel prices

Everyone's been griping about the cost of fuel lately. And for good reason.




Everyone’s been griping about the cost of fuel lately. And for good reason.

The cost of diesel and gasoline is affecting everyone. You can see it everywhere you look.

Owner/operators are going out of business. Plant workers are losing their jobs as auto makers come to realize that the market for gas-guzzling trucks and SUVs has evaporated. The prices of food and goods are increasing.

It appears that we’re on a very slippery slope that’s not going to level off any time too soon.

While some insist our economy is going to avoid a recession, I have a hard time believing that. I’m not an economist, but even my elementary understanding of economics suggests otherwise. It doesn’t take a rocket scientist to work it out.

It costs me over $40 to fill up my reasonably fuel-efficient Toyota Corolla. It used to cost less than half that. That’s over $20 every time I fill up that doesn’t go towards dinners out, a night at the movies, home improvement purchases at Canadian Tire – you name it.

We’re a consumer-driven economy and now that consumers are diverting an unprecedented percentage of their disposable income towards the cost of gas, there’s a lot less left over for nonessential purchases.

How long can our economy hold up, when billions of dollars is being diverted from the purchase of goods, or even personal savings, towards the cost of gas?

I spend a lot of my driving time listening to XM 171 – the trucking station on XM satellite radio.

The stories I’m hearing from south of the border are downright scary. Guys are foreclosing on their houses and living out of their trucks.

They’re going broke, because they have no equity in their homes or in their trucks, credit’s no longer available, and in some cases they’re even having a hard time finding driving jobs. Nobody would have predicted that, even a few years ago.

What happens in the US, usually works its way to Canada as well. I shudder at the thought.

A recent report suggested that globalization is reversible and that the high cost of fuel may, in fact, reverse the globalization that has taken place in recent years. Maybe that’s a good thing.

Maybe we’ll revert back to simpler times when we grew our own food, took care of our neighbours and supported local businesses.

Maybe it’ll force us to come up with ways to lessen our dependence on oil that’s produced half a world away. We’ve had the blinders on for far too long and have dug ourselves into a real hole.

Now, more than ever, we need our leaders to help get us back out of it and to provide us with alternatives to the usual way of doing things. Every crisis presents opportunities. Here’s hoping some of our brightest young minds can develop the answers we need to get us back on track.

– James Menzies can be reached by phone at (416) 510-6896 or by e-mail at jmenzies@trucknews.com.


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