Image: Motorists
Andy Wong  /  AP
Motorists wait at a gas station in Kuala Lumpur, Malaysia, on May 4. Rising oil prices has bred frustration from all kinds of people around the world.
updated 7/12/2005 3:53:47 PM ET 2005-07-12T19:53:47

Pricey oil this year has left Thais in the dark. It's also drawn German drivers to Polish gas pumps, kept cars parked in the United States and fishing boats moored in New Zealand.

Japanese government officials have been told to forgo neckties to help cut the use of air conditioners, while Chinese bars and karaoke parlors have been ordered to simply shut the air conditioners off.

Oil prices near $60 a barrel have bred frustration shared by presidents and peasants, companies and commuters. Consumers are grumbling at U.S. gas pumps, on the German autobahn and in the teeming streets of India's major cities.

"I have no option but to sell my motor bike," said businessman Rahul Mehta in the Indian city of Hyderabad, after oil crossed the $60 mark for the first time last month.

Still, there is less desperation overall than during the Arab oil embargo of 1973. When Middle East oil producers cut off the United States and other countries supporting Israel, gas prices doubled within days. Gas rationing resulted in hoarding and western economies accustomed to cheap oil sputtered into reverse.

Now, more than two years of runaway oil prices are slowing — but not stopping — world economic growth. The economy in the U.S., the world's greatest consumer of crude, grew at a 3.8 percent rate in the first three months of this year. China's economy is expected to expand by about 9 percent in 2005, although it ranks right behind the United States in energy use.

India and other Asian powerhouses also report solid growth. Even most of Western Europe's economies, though certainly feeling the pinch from high oil prices, remain in the black.

Peter Morici, a business professor at University of Maryland, says that while the oil spike has acted as a speed bump to world economic growth, it will not translate into recession this time.

"First, oil prices would have to reach about $90 a barrel to match their previous high in inflation-adjusted dollars," Morici says. "Second, oil is now a smaller share of what we spend (on energy), and this lowers the impact of higher oil prices on both consumers and businesses. Third, we have learned to live with fluctuating oil prices and not to panic."

Consumers still are hurting, however.

Pain at the pump
German drivers lucky enough to live close to Poland cross the border to fill up on gas that is about 15 percent cheaper than the premium of near 1.30 euros a liter ($6 per gallon) they usually see. They also are venting — Juergen Albrecht of the German automobile club ADAC says his organization is inundated by calls from enraged drivers.

"They've long crossed the pain threshold," says Albrecht of German gas prices. Michaela Arnusch of Austria's main motor club says she has been getting a rash of e-mails from enraged members "demanding we do something" about pricey gas.

In America, most people are taking the price hikes in stride and statistics show they are driving more than they did a year ago. But some motorists have simply parked their cars.

Ralph Lorenz of Montgomery, West Virginia, started taking public transportation to his restaurant job in February. He says he is leaving his car parked "until I can afford to pay for it."

Frank Natoli of Newton, New Jersey speaks longingly of the days when his 1972 Plymouth Road Runner cost $10 to fill the tank — and he considered that exorbitant.

"Yesterday my Isuzu Trooper demanded $46," he said, shortly after oil prices first rose over $60.

Heating up
In China, bars and karaoke parlors were ordered to keep air conditioning off until 6 p.m. Factories there have also been told to shift some production to off-peak hours to reduce strains on the electricity grid.

In Thailand, the government has asked motorists to drive more slowly and has appealed for less air conditioner use.

Japanese civil servants have been told to follow the example of Prime Minister Junichiro Koizumi, who showed up at his office May 31 in a long-sleeved blue Okinawan shirt with white trim.

"It's so comfortable not to have a necktie," he said breezily.

Air conditioner thermostats in office buildings have also been set at a warmer-than-usual 28 degrees Celsius (82 Fahrenheit).

Another big change since the 1973 oil crunch is that many appliances use less electricity than 30 years ago. Homes are better insulated and heated with furnaces that use a fraction of the energy than they did back then.

Energy-smart building technology that can dim lights when it's sunny outside and turn off air conditioners when a window is open could soon become even more intelligent. Windows could trap the sun's energy to heat hot water. Sensors that measure the carbon dioxide exhaled by people in a room could determine whether air conditioners need to be turned up.

France and Germany use about 20 percent less oil now than before the first oil spike in 1973, through a combination of high taxes on gasoline, alternative energy sources and a philosophy of conservation that rewards recycling and scorns air conditioners.

U.S. consumption fell at first in response to expensive crude, but it has crept upward again so that Americans use about 16 percent more now.

But even if today's developed economies — more resilient and diversified — can absorb more shocks to their system, some livelihoods are being threatened.

Darren Guard, president of the fishermen's association in the New Zealand port town of Nelson, said that with 40 percent of income spent on diesel, it was becoming unprofitable to fish.

"It's crippling. It's at the stage where boats are being forced to tie up," he told The Nelson Evening Mail.

Associated Press writers Ray Lilley in Wellington, New Zealand, James Prichard in Grand Rapids, Michigan, Chisaki Watanabe in Tokyo, Ashok Sharma in New Delhi, David Rising in Berlin, and Christopher Bodeen in Beijing contributed to this report.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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