Here is my theory, which may make sense of why oil is rising and why we will feel the pinch more than other countries.
Most of world's oil is traded in dollars. With the dollar tanking and with the fear that it is not an investment currency and thus being dumped, the price of oil has to go up in dollars, to sustain the profits ("greeds") of the oil producing companies. Otherwise they will not get the "return" to their investment in dollars and crude they want.
Now, the dollar has been tanking with respect to other countries as well. So the price increase of crude oil in dollars is offset by the loss of value of dollar. Take this example, Dollar stood at 44.23 Indian Rupees at begining of 2007 and the price of crude was about $55/ gallon. Let us say India bought 100 oil futures in dollars then. It paid 100*44.23*55 = Rupees 243,265 for those 100 crude futures. As of today Dollar is 39.45 Rupees, the price of oil is $99.0/ gallon, India is paying 100*39.45*100 = Rupees 394,500. This is an increase of 62.2%. But for us Americans price of crude oil jumped (99/55-1)% = 80%. So theoritically, India has a "net" gain in the investment of fuel prices. We thus feel more pinch than India will at the gas pump. But the question is why is India clamoring for loss of dollar? Because, India sells goods with dollars more than it buys, so if the dollar looses value, so will its profits erode.
Now going a step further, since our politicians and we cannot curb our spending greed, and our desire to save and invest despite of the economy slowin (slowed?) down, Uncle Sam has to pay interest on those treasuries and loans of close to 8 Trillion dollars he owes. How will he do it? By indirectly charging us more on our oil. Oil is a single commodity which we need even if it goes to $200/ gallon. It is a hidden tax which we are paying. Since our government does not have balls to tell our citizens to curb spending, this is indirectly novel way.
Upto a certain extent the CAFE may be thus a smoke screen, because Uncle Sam will need this more money he is getting from us for the oil. That is why the goal is set to 2020. Do you not think that three forthcoming presidents and 6 forthcoming congresses till that date may not overthrow or change this CAFE? I mean it is not part of the constitution and even constitution can be ammended.
Any thoughts?