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Gas Prices Spike, Obama Says May Tap Oil Reserves

Gas prices on Friday March 11,2011 are at $3.542 for a gallon of regular unleaded, according to the AAA Fuel Gauge Report, up 76 cents a gallon from a year ago. Global oil prices have risen about 36 percent over the past year. People are getting more anxious because there is no relief in sight.

Violence in Libya has cut that nation’s oil production by 1 million barrels a day from its usual 1.7 million barrels. Rumors that the violence is spreading into Saudi Arabia, the world’s biggest oil producer at 10 million barrels a day, is another big worry.

President Obama addressing frantic appeals from lawmakers to do something in response to rising gas prices, said Friday he is “prepared” to tap into the country’s ample oil reserve if necessary. Obama also said he encourages domestic drilling in a responsible way.

Obama did not say what conditions that would trigger tapping the reserve, but said it was ready to go and could move quickly if he should choose to call for it. The government is cautious about going to the petroleum reserve, typically holding off except in very extreme cases.

What are the US Petroleum Supply Reserves?

The SPR is an emergency stockpile of 726.6 million barrels of crude oil that the United States has on hand to protect the country from petroleum supply interruptions. This has been used twice for emergency situations, the first in 1991 at the beginning of Desert Storm and the second in 2005 following Hurricane Katrina.

While there have been increasing calls for Obama to tap the SPR with the intention of lowering the high fuel prices that some analysts worry will stall our current economic recovery, other experts question the impact that this move would have.

Gas prices in San Diego are currently averaging over $4.19 a gallon. With gas prices this high,  it makes sense for companies to invest in a fleet GPS tracking system. Tracking vehicles can significantly reduce fuel expenses. Lower fuel bills equal higher net profits. For a fleet of 25 vehicles, idling time reduced by only 15 minutes per day can result in fuel savings of 562.5 gallons at a cost of about $2,357  per year based on California’s current gas prices.  If you reduce idling time by 60 minutes, it would result in a fuel savings of 2,250 gallons at a cost of over $9,427 per year!