Wide-ranging effects of high fuel prices

| Friday, July 11, 2008

As of midday Friday, July 11, oil prices reached record highs of $147 per barrel. And the ripple effect of record-high fuel prices continues to spread through the economy.

Record oil prices have battered the airline industry, and Wednesday, July 9, the airlines called on Congress to act. In an open letter to all airline customers, CEOs from 12 of the nation’s airlines said lawmakers must curb excessive speculation to scale back record fuel costs.

One small measure taken by US Airways to cut costs is to pull the in-flight movie entertainment systems off its domestic flights. The airline says getting rid of the 500 pounds of equipment will save about $10 million a year in fuel.

Toyota, which can’t keep up with orders for its gas-electric Prius hybrid, says it will build more at a new plant in Mississippi that was originally designed to make SUVs.

Agence France-Presse reported that scooter sales ballooned more than tenfold in the United States between 1997 and 2007, climbing from 12,000 to 131,000. According to industry sources, scooter sales have risen 24 percent in the first quarter of 2008 compared to the same quarter in 2007.

And two top Democratic U.S. Senators appear to be dropping their long-standing opposition to off-shore oil drilling.

“I’m open to drilling and responsible production,” Senate Majority Whip Richard Durbin told The Wall Street Journal, adding that Senate Majority Leader Harry Reid could also support the move.

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