Saturday, April 29, 2006

Soaring Gas Prices

Soaring Gas Prices

The Wall Street Journal had a good article on facts about how much we drive and spend on gas each year. Here is what they said.

  1. Driving More Miles: In 2001 the average US family drove 5700 miles commuting back and forth to work vs. 4900 miles in 1990. In 1990 social and recreation driving was larger than commuting back and forth to work. You know what this says to me is the metro areas we live in are getting larger and larger. Also I really think that people want to live where they want to live and not always live where they work. One big way to reduce the cost of the commute is to car pool, not many people do it but it can cut your gas costs in half with just one rider, not to mention the reduction in wear in tear on your car.
  2. Average Gas Spending Per Year: Trying to reduce your gas cost? The average American driver uses 500 gallons of gasoline a year. So if gas is up a buck you get to spend $500 more per year buying gas, which is $10 per week or $40 per month. It is not life altering but it does hurt putting $90 of gas into your wife's Ford Expedition. Some people that I know have bougth a commuter car. They have picked up a nice used Grand Am or something that gets about twice the mileage that there Chevy Tahoe gets.
  3. Increase in gas theft: With rising gas prices many gas stations are reporting an increase in gas theft. In 2004 gas theft cost the industry $237 million which was about 1 in every 1100 fillups was a drive off. First of all in a lot of states I think you loose your license and get a fine so it really isn't worth stealing gas, pretty big penalties. You know these facts are from 2004 and they increased $37 million from 2003. I can only imagine how high the drive off rate is now. Make sure if you park your car outside at night that you invest in a locking gas cap. If you can park in a well lite area do it. You never know when someone will want to steal gas from you car too. It happened to my Dad when I was a kid back in the 1970s when we had 70's the oil crisis.
  4. Who has the highest gas prices? Not surprisingly Hawaii has the highest gas price in the nation at $3.30 per gallon, followed by California, New York, Connecticut and Maryland. You know this is probably classic supply and demand. Hawaii supply cost has to be high because of the location, I don't feel too bad for them Hawaii is really nice. The other states have high population and high demand. To find the lowest gas prices checkout my post on Gas Buddy a website that finds the lowest prices in the nation, pretty useful.
  5. Mars & Venus: WSJ says that women drive 36 miles per day vs. men who drive 45. This doesn't surprise me. My wife hates to drive very far anyway.
  6. Motor Home and RV drivers don't care: The WSJ says that motorhome and RV drivers don't seem to be affected by the high gas prices. They say that there are 8 million homes that own at least one RV, which is a 15% increase over 4 years ago. They point out that RV owners spend about 65% less that other travelers on food, accomodations and travel, largely beacuse of inexpensive camping sites and lots of backyard barbeque. That's the way I look at it. We have an RV and I rationalize it this way, if I stay in a cheap hotel in a resort area it cost me at least $100 to $125 per night and this is a cheap no frills place. The wife will not be happy at the place. If I stay 3 nights that would be lets says $300. Food for a family of 4 will cost me $15 for breakfast, $25 to $30 minimum for lunch, and $30 to $50 for dinner especially if you have some drinks it could be even more. You could eat of the dollar menu all the time but that gets old quick. So that is a minimum $70 for food/day if you are eating out multiply by 3 and that is $210. So hotel plus food is $510. If I travel 200 miles with the RV in each direction, that is 400 miles at 10 miles per gallon or 40 gallons of gas x $3 per gallon I spend $120 on gas. But remember you were going to drive there anyway lets say in a car at 20 MPG so the extra fule cost is only $60 bucks. When we RV we mostly eat the food we brought so we save big on the food cost as well as the room costs. Most of the time the camp ground cost is only $25 to $35 a night. Additionally when we RV we don't have to look for entertainment all day long which is also expensive. We ride bikes, go swimming, play games, it really is great family time. Anyway I am rambling, the fact is I own the RV and that is the largest expense anyway, using it really isn't that expensive when you compare to staying in a hotel. Of course staying at home would be cheaper but then we would just go shopping and out to dinner and that isn't cheaper either.
  7. Fuel economy stays steady: In 1979 the average passenger car fuel economy was 17 miles per gallon and light trucks were about the same. The MPG climbed pretty well up to 1993 when cars leveled out at 27 miles per gallon and light trucks at around 23. After that they stopped increasing. You know what happend we entered the roaring 90's the age of the SUV. Bigger is better, more Horse Power is better. The US automanufacturers did an effective job of lobbying congress to not increase CAFE or corporate average fuel econony and it stood still for 13 years. Now the Big 3 are complaining because no one wants SUV anymore. Duh! They had 13 years to figure out how to make them more fuel effiecient. Why doesn't every SUV have a clean diesel in it with an 8 speed automatic transmission. They would probably get 30 MPG! Ahhh! What were they thinking.
  8. Spending on oil and gas up: In 1983 the average person spend 5.5% of there income on gas. This went down to 2.5% throughout the 1990s. Probably why no one worried about increasing the mileage of an SUV. In 2005 this increased slightly to 3% and now everyone is worried. However, that is the main reason why the $3 gas prices haven't launched the US into another recession. The amount we are spending on gas is still lower than what we were spending in 1983.

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  5. Save Money with Gas Rebate Cards
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