Rising petrol prices dominate US agenda

Continuing increases are the main topic of conversation in the country, with everyone hit in the pocket by the trend.

It’s the topic which dominates most conversations in America.
People meet up, exchange greetings and then ask how much it cost to fill up.
The rise in petrol prices is hitting everyone where it hurts – in the pocket.
At a petrol station in Virginia we checked out, the price of a gallon of petrol went up ten cents overnight.
The national average we’re told from people who are monitoring these things is $3.96.

That’s below the psychologically important $4 barrier, but drive from the centre of Washington into northern Virginia and prices range from $5.12 near the Watergate Building, to $4.11 on one of the main commuter routes.
In a country where people love their cars, where public transport is poor, it’s adding a lot of extra cost to already hard pressed budgets.
One woman who was filing up told us she was now spending at least $20 a week more on fuel which is tough when every cent is already committed.
Another told us how she and her husband were trying to co-ordinate their working days better so they can share a car.
Compared to many places around the world, petrol in the US remains inexpensive. 

In Norway, for example, people pay roughly the equivalent of $6.25 a gallon, and in the Netherlands it’s around 20 cents more.

But America is not only used to cheap petrol, it expects it. 

Budgets are set with low prices in mind. When it exceeds even the most pessimistic predictions, that bumps up the cost of transport, impacting on the price of almost everything else. 

Companies start to struggle and look to the costs they can control, which almost inevitably means staffing.

And household budgets become tight as well, with the danger of jobs being lost. 

In a country which is crawling out of recession – it’s another obstacle to recovery.

The rising prices obsess politicians. They hold hearings and news conferences and talk about holding the oil companies to account.

There are three big reasons for the spike in prices.

Firstly, the trouble in the Middle East makes people worried about supplies. 

Then there are speculators who buy what oil is on the market and hold it back to drive up prices and increase their profits. 

And there is growing demand. The growing economies in China and India want more oil and through very basic supply and demand economics, that drives up prices.

But one US senator from Ohio, Democrat Sherrod Brown, believes the oil companies are taking advantage.

He’s introducing a bill which will increase the taxes on the oil companies.

He says: “Nobody one really believes supply and demand rules apply here or principles apply here when you see prices go up, spike the way they do.

“It’s got way more to do with speculation and way more to do with the oil industry gaming the system”.

President Barack Obama received a boost in support from the killing of Osama Bin Laden – but when it comes to handling the economy, public confidence in his ability to get on top of the issues is way down.

And the biggest problem is the soaring cost at the pumps.

As we stand near the forecourt of the petrol station in Virginia, the price comes down five cents. 

The owner says with the two stations nearby charging more – he hopes to attract some of their customers.

But he admits the price will rise tomorrow and it’s likely to be higher than the peak today. 

There are those who still hope the price will drop soon but the trend is up – and America better get used to paying it.