Gas prices continue to rise

http://www.bizjournals.com/losangeles/stories/2007/02/12/daily49.html

Gas prices continued to climb up this week across Southern California, although it is unclear whether the upturn is the beginning an annual springtime price spike at the pump.
According to the Automobile Club of Southern California's Weekend Gas Watch, the average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $2.643, which is 8.4 cents higher than last week, six cents higher than last month, and seven cents higher than last year.


On the Central Coast, the average price is $2.799, up 8.1 cents from last week, half a cent above last month, and 10 cents higher than last year.
In the Inland Empire, the average price is $2.646, eight cents above last week, four cents higher than last month, and six cents higher than last year.
"Supplies have tightened in California because of issues such as last week's shutdown of the state's fifth-largest crude oil field after an explosion," Auto Club spokesperson Carol Thorp said in a statement.
"But even without disasters, we've seen a pattern over the last seven years of a spring gas price spike due to increased demand and consistently low inventories at this time of year. The Auto Club recommends that during periods of price increases such as this one, drivers should make extra efforts to conserve gasoline."


So I knew there would have to be an article out there about gas that has to do with supply and demand and this was just the first good one that I came across. The article talks about California's rising gas prices, which is partly the result of a decrease in supply because of an explosion at a crude oil field. The article explained that there is also more demand and lower inventories at this time of the year. I understand there being more demand; people are out and about during the holidays, then in January they hibernate to get over that holiday rush. Now its February and people are driving more again. I wasn't sure why supply would be low consistently at this time of year. Maybe suppliers realize the pattern of people demanding less during January, so less is going to gas stations. Then when people start demanding more, not enough can be supplied in time to meet the demand??

Wisconsin Gov. Jim Doyle Proposes Cigarette Tax Increase Up To $1.25 Per Pack

http://www.medicalnewstoday.com/medicalnews.php?newsid=61633&nfid=rssfeeds

This article is based on the recent increase Gov. Doyle proposed for the cigarette tax in Wisconsin. Doyle said he would support the increase only if revenue earned (estimated to be $197.6 million/yr) is used exclusively for smoking-related health services. For lawmakers to get Doyle to remove this proposal from his spending plan, they will have to make cuts to offset rising health care costs.
This article reminded me of a segment in Naked Economics specifically about the effects that taxes on undesirable activity have on the economy. Lawmakers try to make these taxes seem spectacular, because not only do they reduce the number of people doing them, but they also help with paying for health care costs of treating the after effects, like cancer. However, by using taxation to promote a healthy lifestyle, we are increasing the life span of many individuals. If they are living longer, then they are benefiting from Social Security longer and living in nursing homes for less time. Also, when people stop smoking, which is bound to happen with an increased tax, the revenue gained from the tax is going to drop each year. Smokers can also find ways around the tax. Many individuals will go to other states where taxes are lower or turn to internet vendors or, if they are really addicted, the increasing black market.