Dr. Frates on Oil Prices

The Business Press, with coverage in the Inland Empire, has an article about the effect of recently high oil prices on local businesses. As would be expected, companies feel increasing pressure from the rise in the cost of gasoline, to the point of raising delivery fees and using other methods to recuperating their costs. Dr. Frates explains why this is the case:

Increased demand for crude oil worldwide, particularly in China and India, along with insufficient domestic production and a weak U.S. dollar are combining to drive gasoline prices to record levels, said Steve Frates, a senior fellow with The Rose Institute of State and Local Government at Claremont McKenna College.

“I think there’s something psychological about paying $4 a gallon and you may start to see a big change in people’s behavior pretty soon,” Frates said. “There’s a possibility that ethanol might help solve the fuel problem. I don’t know whether that will work, but I think we’re to a point where most people would be willing to try that.”

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