The world is round

I can't remember when the price of gasoline was this low. It always seemed to hover around the P40-50 per liter range, sometimes even higher. The price of crude oil continues its slide, which explains why gasoline is now in the P35-36 per liter range. The small players even sell them cheaper, if you know where to look. The cheap fuel may be part of the reason why we still have horrendous traffic well past the holiday season. More people are using their cars than before.

Analysts say that the reason for the slide is less demand for the commodity. China, probably the biggest buyer of oil especially at the start of the new millennium, has somewhat slowed down. China's economy grew exponentially, fueling their enormous industries. Oil producing nations were happy having China as a buyer. It's a totally different story today.

The law of supply and demand has taken over. With China slowing down, there is a surplus of oil in the market. Normally, oil producing countries would respond by pulling back oil production to maintain prices. Surprisingly, it is not the case this time. Some analysts say that these countries do not want to lose the customers they still have by moving to keep prices high. Another result of the high oil prices of past years was that countries like the US and Canada have stepped up their search for indigenous oil, to cut back their dependency on oil imports. And they have been successful.

Still, while the world seems to be enjoying a period of cheap gasoline, countries like Russia and Venezuela whose main export is oil are in trouble. Some even say their economies are on the verge of a meltdown. OPEC has likewise been silent so far, choosing to let things play out, instead of wringing the world's neck once again. And here is where the danger lies.

The saying that when you're down, the only way to go is up, may likely play out for the oil industry. Like a fault line building up its energy, and when the right time comes, all hell breaks loose. Analysts say that this honeymoon period will not last. As to when will oil start its menacing way up is still anybody's guess, but it will happen. I do have to say that commodities and services dependent on fuel have not gone down as fast as the price of gasoline. The transportation sector is still debating as to how much rates should be cut. This includes the flagdown rates for taxis. Prices of basic commodities seem to remain the same, despite delivery costs surely going down. Businesses are obviously taking advantage of the situation, as they often do. Creative reasons for maintaining the same prices have cropped up, with "port congestion" being the phrase of the day.

Let's hope that the phase lasts for a considerable amount of time. The world does deserve a break. After all, the world is round, isn't it?