The US national average for gasoline has increased around 55 cents per gallon from one year ago. Even so, prices are still a bit lower than they were back in May of 2007, but experts are predicting the price to continue increasing. There is a lot of discussion about what effect this has on the average person, so I’m curious to see what others are feeling. I know in my situation, about a year ago it cost me about $35 a week for my car. Last fall, it was running about $38, and my last week’s cost was just shy of $40.
So, that is roughly $2-$5 more per week than what I was typically paying in 2007. While it certainly doesn’t break the bank, it doesn’t go completely unnoticed. I sure wouldn’t want to increase my commuting distance or have a car has worse gas mileage though. So, what does the increasing cost of gas mean for you?
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
The gas prices aren't affecting me enough to budget differently, but it is significant. There are some cool websites where you can locate the cheapest gas stations in your area.
The problem isn't as much the supply (which hasn't change much) but all the speculative money that has made the oil price skyrocket, mainly cause by the US dollar decline. In reality, Oil price should be no more than $70 a barrel and probably a bit less. However, I am glad in a way that price have gone this high as it will create more positive environmental changes.
It's no secret that I work for one of the oil companies (I'm one of the good guys I swear!!). Of course I don't see any of the profits when the gas prices go up. My wife and I share a small car which we are currently planning to upgrade (see my website challenge you can help buy and choose my car!).
A 10% jump in gas prices is about an extra $15 or so a month for us.
One good thing is it does encourage people to slow down on the highway to increase their gas mileage, as well as curb their recreational driving.
What's bad for your wallet is actually good for the environment.
I drive a hybrid Civic, so I spend very little on gas, even with the increase. My wife has a CR-V, so it's more noticeable there, but still reasonable. I haven't changed my driving habits due to more expensive gasoline. Once we hit $4 ( psychological barrier? ), I'll probably drive less.
We purchased a diesel Jetta last year and had it converted to run on waste vegetable oil - so initially the cost of gas resulted in a major lifestyle change but now I don't even notice the price of gas as I drive by the filling stations.
The gas prices aren't having too large of an effect, but I'm aware of them. I don't think I'm in a hurry to buy a large truck though.
Fortunately, I have a company vehicle for which I pay $60 a month. This includes gas and maintenance. I only use my personal vehicle on the weekend and a tank of gas will last me for a month.
I commuted 80 miles a day for 9 years. I moved closer to work just before the gas prices really started to spike. Prior to the move, the cost of gas was still burdensome due to the lengthy commute. I missed a couple of workdays because I had no gas money.
Now my drive is less than 20 miles a day. I can easily afford that. I plan my shopping along my work route to be as efficient as I can. If I had not moved, I don't know what I would have done.
I take mass transit to work while my wife drives. But since we keep track of the bills regularly in Quicken, the amount it takes to fill up the gas tank is definitely notiecable. It's passed the "dinner out" level and entered the "expensive dinner out" level and is soon moving into the "over priced and totally not worth it dinner out" realm.
I ride the metro to work and walk to-from the station so I tend to only drive about twice per week (mondays for school and usually 1-2 times on the weekends). My wife drives over 40 miles for work roundtrip, but she drives a fairly efficient MINI Cooper. I expect if it went up to $5-6 per gallon, we would start feeling it, but I think we feel it more now through cost of goods than directly in our gas tanks.
Hmm... Good point, Lily, about public transportation raising rates to pay for fuel. But, I'm in Boston, where the MBTA is in so much debt anyway that even if gas was dirt cheap we'd still have fare hikes.
I'm an express bus girl myself. However, the MTA (New York's transportation department) isn't shy about raising fares. If gas prices keep going up, I can count on another fare increase in the future.
I did read somewhere that gas prices will not keep going up, though. Despite the protest of a couple of members, most OPEC nations favor keeping sufficient or even a surplus of supply in the market rather than risking continual high prices. They believe that high prices will drive alternative fuel research and changing habits (driving less, fewer road trips, more fuel efficient cars). Ah cartels ... I enjoyed our time together in my college Industrial Organization class.