Thursday, March 3, 2011

Companies Expect Pricier Gas; How ‘bout You?

“Fuel prices will go up over time.” That’s a quote from William Clay Ford, Jr., executive chairman of the board of directors of Ford Motor Company, on National Public Radio today.

The manufacturer is basing its entire business model on the expectation that oil prices will continue to rise. Costlier gas will be a fact of life, according to Mr. Ford and just about anybody else willing to venture a prediction.

For Ford Motor, that means electric cars will become one of its major products. If you’re among those who can afford to run out and buy one of these new models, you’ll have plenty to choose from in just a year or two.

But most Honolulu residents will continue to plunge the nozzle into their gas tanks rather than plug in. That means you’ll likely see $4-per-gallon gas soon (this weekend?) and much higher prices in the years ahead.

A Likely Scenario

As the purchase price of electric cars comes down with more models to choose from, our population will gradually shift from gasoline to electron power. By the time Honolulu rail is fully built, gas prices will have become almost prohibitive.

Those with the means to purchase electric cars will have done so, but many others still driving internal combustion vehicles will adjust their budgets to accommodate those higher costs.

Commuting by rail will be a viable option, and many families will compare their travel options and conclude rail transportation will save them literally thousands of dollars each year. The cost of a monthly transit pass ($60 today) will be far far less expensive than fueling their car for the daily commute.

By taking the train, the commuter also will avoid parking costs. Fewer miles put on the car will reduce maintenance expenses. Train travel will be so convenient and cost-effective for many families that they’ll decide to give up their second vehicle and completely eliminate its expenses.

It’s not too soon to imagine the positive money- and time-saving effects Honolulu rail will have for tens of thousands of Oahu families.

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