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Much Ado About Gas Prices
markmcb writes "It seems that a week cannot pass without finding big news about gas prices. They're up, they're down ... but why do we care so much? OmniNerd posted an article that aims to put gas prices in perspective. The author takes a look at other commodities and their price variances and applies some simple math in order to make the claim that best-gas-price-hunting is an effort that could be better used on other products. From the article, 'Why the disproportionate emphasis on gas prices in our culture, then? Although some cite a failure of politicians or media populists to account for inflation and purchasing power changes, I think it is simply because gas prices are in your face.'" IMO, the other side to the price of gas is that, especially in developed countries, it has a pervasive effect throughout all layers of the economy — food prices (because of the trucking), schools (busing), etc., etc.
This article is just a very vigorous proof that you're an idiot if you spend any time at all searching for the cheapest gas. We all know that some gas stations don't follow the unspoken price rule where you don't undercut your competitors and they won't undercut you. Some people must feel very smart finding those gas stations. How much gas they waste getting to them might be interesting to compute also. Oh well, as long as it makes you feel good inside.
I remember when Exxon Mobile reported the largest profits ever received by a company in a single quarter. While they were raking in that dough, they were telling me that hurricane Katrina and the war had left them with no oil at all. They warned me gas prices were going to go up. Then why the hell did they make record profits?
What I would like to read an article about what the hell happened with the congressional hearing that was supposed to investigate Exxon Mobile? And we're subsidizing gasoline companies through preferential tax codes? Am I the only person wondering what is going on here?
My work here is dung.
Wish we *had* public transport to use.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
The point that wasn't put forward so well in the article is that the Gas price can change everything.
Your shopping for example will go up in price as it costs more to transport it. Your electricity/gas at home can go up in price too.
Because pointing out a 40% jump in gas prices is startling to people who are bad at math and don't track their expenses very well?
Maybe if they made headlines like "gas prices jump enough to force you to cut back on 1 Starbucks grande per week to break even!" people would understand the implications a little better?
The reason we care so much is that many of us spend more on gas than any other commodity. We consider it as essential as food. And its price varies wildly from season to season. I spend roughly $300 US each month on gas currently, and when it was higher you bet your ass I cared that I was spending an extra $50 a month.
Would you pay $6/gallon for gas to support the taxes required for all those socialist services?
I've had enough abrasive sigs. Kittens are cute and fuzzy.
Expect gas prices to continue to decline up to the November elections. Oil companies will forgo the profits short-term in order to give oil-friendly Republicans a better shot at the polls.
After the election, look for a price spike, probably blamed on increased heating demand and Middle East instability.
And no, you can't have my tinfoil hat.
Another problem is that it's a big deal because the media makes it a big deal.
And the media makes it a big deal because the status quo for intellegence is not very high. Average Joe customer simply sees things on the surface and doesn't do any deep thinking. I remember hearing someone that I know say "I guess buying a diesel car is the way to go". No doubt he simply thought that because the price of gas on diesel cars was advertised as a few cents cheaper per gallon at the time. Now, its the opposite. And I don't know this for sure, but aren't diesel cars more expensive? If that's the case then you'd be losing money overall.
As Americans, we are spoiled!
We are accustomed to cheap gas and all its by-products (heating oil, propane, electricity, etc.) for some time now. So much so, that we take it for granted. On top of that we extend ourselves to the max, getting credit cards and running up debt like crazy. So, when all of sudden this cheap energy source doubles in price and now stresses everyones budget, we scream foul. That is why gas prices are so closely watched and such a hot topic. We can afford the spike. Other countries have dealt with high energy prices by promoting mass transit, build more efficient cars, etc. But we just can't relate.
European cars get better mileage and it is easier to live without a car there than it is in the US, where every store is a 20 minute drive away and there is only the barest shell of viable public transport. A lot of this is due to the political landscape in the US which is extremely friendly to large auto and oil corporations, but maybe this will change as gas prices inexorably continue upward and people start asking for change.
Gas prices are driven because of the spot market on oil, and the way it's basically a "futures market".
American consumers don't have to deal with the extreme volatility that is involved with such a rampantly speculative market on a day to day basis, EXCEPT when it comes to gas prices. This makes them a lot more visible than other speculative swings.
I'm a fiscal conservative, it's a pity we don't have a political party anymore
It's not so bad, prices are set to decline and stay 'lower' for a while... like until November.
Nothing like an election year to get incumbents to make hot ticket issues temporarily disappear. Also, expect a sharp rise in fuel costs come December due to a "heating oil usage spike" and "conversion to winter fuels" coupled with the "winter travel season" and rise in demand from "winter recreation vehicles". You likely won't see "lack of political pressure" as a reason for higher prices though.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
I can't believe people aren't figuring this out.
It's election season, dumbasses, they're lowering prices to help out their buddies in Washington.
how much gas did he waste by driving around to different stores to do this article? It's rather simple: 1. Combine trips to stores. 2. Use the bus/public transit for work commutes. 3. Use something like pittsburghgasprices.com (my area) to find the cheapest gas within a 5 miles radius. Check frequently. 4. Don't drive your car like you stole it. See a red light far up ahead? Coast into it. I have two vehicles, use the bus to commute to work, and consolidate my trips as much as possible. I fill up each vehicle every month and 1/2. Gas prices stopped bothering me once I got these habits down.
http://www.CelloFourteGroupie.net
I would gladly pay $6/gallon if it would get all the jackasses driving Yukons with one passenger off the road. The public transit would be nice, but it would require everyone to not live on 3/4 acre in a development 35 miles from the center of the city for it to be even plausable.
I'm more shocked by the people who bitch about gas prices while chugging away on their third $4.00 cup of Starbucks that morning.
This guy's the limit!
I always hear about people complaining about gas prices. Then someone always makes the comparison that a cup of coffee at starbucks is like $10 a gallon so gas is relatively cheap. To that I say so what. I don't need to buy 15-20 gallons of coffee a week, but I do need 15-20 gallons of gasoline a week. The complaint is that gas prices go up 5 cents and people freak out. Well, 5 cents * 20 may only be $1 more a week. But then next week it goes up again. Here in the US (I know prices are better here than most places), just 5 years ago gas was $1.50. So now, It is $1.50 more a gallon, multiply that by 20 gallons and it is $30 more a fillup. Multiply that by 52 weeks a year and it is $1560. Now that is something to complain about. Oh, and I know I am from the US, but I have a fuel economy car (33 mpg) and I have a 30 minute commute. Oh, and for those of you that say move closer to your work, that is not possible because I work someplace that the cost of living is far out of my price range, which may be why most of the people at my company have 20+ minute commute.
Why the disproportionate emphasis on gas prices in our culture, then?
The American psyche is centered on the idea (illusory or not) of freedom. And we have attached to that idea the symbol of the automobile. We have, as a culture, over the last 50 years or so, begun defining people by the car they drive. Men in minivans are whipped. Women in SUVs are lesbians. Everyone in a sports car is either wealthy or glamorous (depending on their state of obesity) or both. Big comfortable cars are called "luxury" cars (and have luxury prices). The prius is the end all be all of environmental conservatism now. But we have the car fixed in our collective psyche as a must have of american culture, and necessity of any life (and in cities with rotten public transport systems, it is). That necessity status that cars have is what makes gas prices so ubiquitous in our world. Higher gas prices are big oil attacking our freedoms, limiting our range and mobility, and status. Lower gas prices widen these things.
In most Western Countries, you can choose where you live. I could have chosen to live within the City Limits, where the store is within walking distance (and public transportation is actually quite good). Instead, I chose to build a house in the suburbs. It is MY OWN DAMN FAULT that I now have to pay $50 a week to fill up my Ford Escape. And, my wife and I chose to purchase a fuel-efficient Mazda 3, because her new job had a very long commute.
If you feel that the stores are too far away, then either move to a new house (closer to the stores you shop at), or buy a more fuel-efficient car.
You speak as though 3/4 of an acre is a large lot. It's a decent sized yard at best. 1 acre is the smallest lot I'll even consider when looking at houses. It's a luxury of living in the large nation that we do. We don't have to be crowded into small spaces in dirty cities. We can choose to live in comfort and have some space for kids to enjoy, and to build shit on.
nothing
Companies set prices by margins. You pay X for your supply, mark it up Y% margin, and profit Z when you sell it. It doesn't take a genius to figure out that when the price of X goes through the roof, Y% stays the same (which it did in the oil business, margin was around 10% which is actually lower than many industries), then Z goes up as well.
People who complain about this are either ignorant or anti-capitalist. Just be honest about which one it is.
"with my curiosity peeked"
Not written by an English major.
Anyway, his analysis is also flawed. I don't spend $1500/year on bell peppers, so I don't worry about one costing an extra $1 once in a while. I also don't fight wars and hide half the cost of bell peppers in the Defense budget and casualty figures.
Would you pay the taxes to subsidize the petroleum indestry, so they only have to charge you $3/gallon at the pump?
Car companies do not yet know how to produce diesel cars that pass emission standards in all 50 states. Not many companies are going to market a car here that they can't sell in California. This is probably why the only diesel cars you can buy here are from european companies. Diesels are popular in europe so the cost of developing the technology is already covered and they aren't risking much by selling them here is most (but not all) states.
Companies are working on making diesel cars that pass the standards (trucks have a lower standard which is why you do see some diesel pickups and SUVs in the US) but I don't think the tech is there yet. The feds forcing gas companies to only sell low sulfur diesel fuel is helping since that is supposed to make it easier for car companies to make the new clean diesels -- plus low sulfur fuel doesn't smell as bad as the old fuel did.
I think diesels are also not as popular here because most people remember what diesel cars were like the last time people started worrying about gas prices (and thus diesels jumped in popularity.) In the 1970's diesels were much more dirty and noisy and smelly than they are today. Plus back then you often had to wait for several minutes for the glow plugs to warm up. Of course the newer cars are much better but most americans haven't figured that out yet.
TFA: According to the Energy Information Administration, the average cost of gas in the U.S. that year was $1.85 per gallon of regular grade4 and the average gas mileage of a new, light-duty vehicle was 21 mpg
Okay, forget the rest of the damn article. Amercia, your problem is right there: MPG.
Whilst American cars struggle to reach 25MPG, the average MPG of a European car is over 40MPG (source).
How can the country that has MIT have such crappy MPG? I mean, aren't you chaps utterly ashamed of your engineers? Forget saving money, just bring it down to technical prowess. Why aren't American engineering nerds hanging their head in shame?
I have a 4x4 SUV that does better than 25MPG, not just on the motorway and country lanes, but on crowded higgledy-piggledy British towns. And it's a stupid 4x4 that I only really need in the winter! My mother's sporty saloon car does 45MPG. My wife's Volvo (read: APC with upholstery) does 35MPG. What the hell are you Yanks driving to need that much fuel per mile? Do you just grab a fire truck and bolt a couch to it, or what?
(Even given 1 Imperial gallon = 1.2 US Gallons, your MPG still sucks, Amercia)
Andrew Oakley - www.aoakley.com
I hate driving in traffic. I would love to take the bus. However, I just can't do it with the current options. One major reason is that I have to pick up one of my children from after school care by 6:00pm. To do that, I would have to take the 4:25 bus from work, which is a little difficult when I get off at 5:00. Of course, I could start work earlier, which means I would have to catch the first bus of the day at 6:00, which is a little difficult since my son's school bus doesn't arrive until 7:25 and the school won't allow children to be dropped off until 8:00. I could enroll him in the before school care, too, but that doesn't start until 7:00, which still is insufficient for catching the 6:00 bus.
So, as much as I hate driving during rush hour (if you can call creeping at 15 mph driving), I still prefer it over riding the bus with the options I currently have.
The city here puts a lot of effort into showing how much effort they are putting into public transportation. They don't seem to put much effort into making it at all convenient for people to use.
Edward Burr
Having a smoking section in a restaurant is like having a peeing section in a swimming pool.
The downside from those large lots, as it relates to the price of gas, is that neighbohoods built that way essentially preclude public transportation. Things are too spread out to make public transportation economical because each bus stop would service only a few people. And essential services, like the grocery store, will be too far away to walk to, so you end up having to have a car for everything; even a stay-at-home spouse must have a car.
But clearly that's the way many people like to live. I've got my own 1/4 acre and would love to be even further spread out from my neighbors. Maybe as a society we're rich enough to afford it, and maybe the oil will hold out long enough to support it.
But it has economic consquences, and you need to be aware of what they are if you're going to make rational choices. It's more than just a question of how much land is available.
What bizarre logic.
Most people's daily drive is roughly the same however large the country they live in. To take an extreme example, I used to live in Houston, Texas. My commute was 5 miles each way. I drove about 8000 miles a year.
I now live in the Isle of Man - the *entire* island could fit inside the area of greater Houston. I drive around 12,000 miles a year - my commute is now 12 miles each way, and I do more longer journeys by car (up to 30 miles each way).
Oolite: Elite-like game. For Mac, Linux and Windows
If you think that is such a good idea, shout it out so EVERYONE wants the same used oil...
Oil still costs about $12:bbl to extract from the ground, and deliver to the refinery as it did in 2001. It still costs the same to refine it to gas and deliver it to your pump. But oil costs about $75 now, not $25. That means that we're not looking at just a tripling of price in 5 years, but rather almost five times the profit. While the rest of the country's economy, except for these energy corporations and banks, is stagnant or shrinking.
You're also paying for artificially tight refining capacity and the risk that something disrupts the supply chain. From what I hear, the cost of extraction may still be the same, but the quality of oil has declined especially in Saudi Arabia. That means higher refining costs before low quality oil meets the standards of oil traded at index price.
The way to avoid price gouging at the gas pump is to lower the barrier to entry for refineries. The US government can contribute by cutting back on the regulation burden. Breaking up OPEC would also be nice, but I don't see anything with the power to make that happen.
Finally, I don't see the point with the automobile layoffs. This was going to happen. The US auto makers aren't competitive in quality of product or labor costs. This is particularly true of GM which is most of the current run of layoffs. They've been bleeding market share for decades. Blame transference to oil might result in bad economic decisions by the federal government but it's not going to recover those jobs.
Your SUV is ruining my air.
It is.
If you voted for Bush you are uninformed or an idiot.
You are.
We must do something about global warming even if it isn't caused by us, just in case.
How's your electricity bill going to be when you burn coal to run your air conditioner?
Bush is the worst terrorist on the face of the planet.
Among the worst, yes.
Bush is in Iraq to keep oil prices low for Americans.
Of course, how else can you keep your car-dependent suburban lifestyle going?
Bush is in Iraq becuase of his interest in oil and the money he makes.
No kidding.
Bush is in Iraq because he is paid by weapons manufacturers.
Not directly, but do you think your weapons-based corporate welfare system doesn't need some sort of system to persuade the taxpayers to keep paying taxes?
Bush is in Iraq beacuse his daddy failed there.
Debatable, but sensible.
Christians and Muslims are the same because the Christians had the Crusades around 1100 A.D.
They're both people. They're the same.
I seriously question the sanity of people who want to live in the suburbs, away from all the amenities cities offer, where the crime rate is significantly higher, the asses fatter (and who wants to see and/or have fat asses?), travel more expensive, and for culture you have to choose between bible study and a movie theatre that only shows Hollywood's most lackluster, big-budget flops. And all so that you can have some grass to mow. I hate to throw around the word stupid ... actually that's not true. I use the word stupid rather liberally. But in this case, I think it's warranted.
Of course, if you want to talk about actual small towns (as opposed to suburbs of real cities), that's a slightly different story, and a much more positive one. But I digress.
It's pretty clear that the oil companies are plotting to help their good friend Deborah Pryce (and the Republicans generally) in Ohio, but I don't quite follow how they arrange that.
This is the left's version of intelligent design. Gas prices can't possibly be a result of decentralized market forces, there has to be a secret cabal determining what to charge in order to help Republicans win elections. Gas prices fall every single year at the end of summer. They've fallen especially rapidly this year because many events feared by speculators (such as hurricanes and war with Iran) failed to materialize.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
This is referred to as "zone pricing." It is a prime example of how oil companies are gouging
Good grief. I suppose it's also "gouging" when a house in San Jose costs more than an identical house in Peoria. The same people who claim gouging when gas stations have different prices would be screaming "collusion!" if the prices were always identical.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
Ha! "Shampoo, 1.99 / liter" on a 3m tall sign would certainly catch my attention.
That's the reason avid coupon clippers can do so well. It makes a bigger difference than most people realize, as supported by TFA.
"We think people rightly feel that once they buy something, it stays bought," --Suw Charman, Open Rights Grp
Work accounts for 50% of my gas usage. My car gets 31mpg on average(requires premium gas however) and is a car I enjoy very much, so i don't feel the need to change cars.
Whats the next suggestion, stop doing things on the weekend?
Bottom line is that gas prices matter, and I do my best to keep costs down. Hence the 31mpg car, buying gas from the cheaper stations, and using a cash back credit card(5% on gas purchases) and paying it off before any fees or interest are applied.
I think its funny that people can very easily say "oh move closer to work", "get a job closer to where you live" or "just buy a more fuel efficient car" as though any of those things actually translate to overall savings. Buying a new car would cost me more than I'd save. New house, holy crap even more. New job, ain't any jobs as good as the one I have now near home. Ultimately the people who suggest this kind of tripe either can't do the rudimentary math or are talking trash from the parents basement on a computer bought by their parents dollars.
Cars with 14 secs 0-60 don't sell in the US.
u el_co.html there)
It's more about what people buy than what can be engineered.
And don't get too excited about your SUV. Your SUV getting 25mpg (Imperial) is only 21.2mpg US.
So you're only the same as the US average you crap on. Well, if the average really were 21mpg. Which apparently it is (see updated link http://www.greencarcongress.com/2004/11/average_f
I do think Americans should value mpg more. But we don't require it in this country, so people don't.
When I needed an AWD car (so I wouldn't have to chain up in Tahoe), I could have bought an SUV cheap. I would have gotten 30% worse mpg, but even at $2.50 a gallon, I'll never get back the extra $15K I spent to avoid that. I can afford to spend more to get better mpg, but I can't expect all Americans to do it. They aren't in the financial position I am.
http://lkml.org/lkml/2005/8/20/95