Featured Articles

RideLust Asks: At What Price Do You Start Worrying About The Cost Of Gasoline?

Posted in driving, Economy Cars, Electric Cars, Environment, Fuel, Fuel-efficient, Gas Prices, Newsworthy by Kurt Ernst | December 10th, 2010 | 9 Responses |

To absolutely no one’s surprise, the price of gasoline is on the rise again, just in time for the holidays. The driving factor is the current price of crude oil, which has now topped $90 per barrel. It doesn’t matter that the gasoline already in the system was refined when oil was less expensive; what matters is that people drive more at the holidays, so retailers can charge more for the product. In fairness, I’m sure gasoline suppliers are charging more to the retailers already, so feel free to pass the blame up the food chain. I know from first hand experience that the gasoline retail business is not for the faint of heart, and only casinos are more relentless in their pursuit of profit than oil companies.

Most of us can absorb a pretty significant increase in the cost of gasoline without any major re-budgeting. Still, there comes a point when you have to take a step back and ponder your options, which may include driving less (fat chance), taking public transportation (if available to you) or even buying a more fuel efficient vehicle. I used to drive around 45,000 miles per year, including 27,000 miles per year just for my commute. At $2.85 per gallon for premium unleaded (in 2007) and with a fuel economy of 26 miles per gallon, I was spending nearly $5,000 per year on gas. Had the price of gas risen by $0.50 per gallon, my costs would have increased by nearly $800 per year, or roughly $67 per month. That would have translated to one less dinner out, but really wouldn’t have changed my life much. At $5.00 per gallon, however, it would have been an entirely different story, and the car would have been parked for all but essential trips. I’d have been racking up miles on the motorcycle, which averages better than 40 mpg.

I suspect we haven’t reached the tipping point yet, at least not for most people. Historically, gas goes up in price, then it comes back down, so most people choose to wait it out and maybe drive a little less when gas is expensive. Here’s my question: what do you pay for gas in your area (regular or premium), and at what point would you start considering other options for transportation? At what price would you consider buying a more fuel efficient car, or even a hybrid? Is there a price at which you’d call gasoline “too expensive”?

Our Best Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

9 Responses

  1. Taylor says:

    Price of gas driven by the price of a barrell of crude???

    That may be part of it but just like all other industry check into the pay structure of the oil companies themselves. How much do they pay out in salary each year? Bonuses?

    I won’t get into a discussion about the ridiculous amounts of money paid to ridiculous numbers of people in large industry, which is 100% the burden of the consumer but I will give an example.

    The son of a former co-worker was/is a trained chemical engineer. Went to work at Phillips as a chemical engineer. At some point his career path changed and he transitioned into concierge type position within Phillips. His job now was to take care of the large corporate accounts. He made sure they were well taken care of if they visited the main offices and went so far as setting up vacations for them. The last time I spoke to either the son or the co-worker was in 2001. At that time he (the son) claimed to make $500K salary and about $300K stock options a year. Judging by the lifestyle he lead, I did not doubt it.

    In the end, the price of gas (and any other good or service we use) will be determined by one entity…US, WE, YOU and I, the CONSUMER however you want to say it.

    The second paragraph in the post is spent rationalizing the increased cost of gas and what would have to be done to make it palatable to a given consumer. The gas companies, all companies with high demand products for that matter, bank on that very fact. They know, gas companies specifically, they have us in a vise by the balls and all they have to do is squeeze just a little harder and we will pay.

    Unfortunately coordinating the gas consuming population of the U.S. to send a clear message will never happen simply because the majority of consumers will just rationalize the problem away.

    You can live on Ramen can’t you??

  2. Richard says:

    Well, id still like to fill my car up at you guys across the big pond..

    We, here in The Netherlands, pay 7,25 per gallon ( Roughly converted from liters to gallons and euro’s to dollars)..

    So it can always be worse for you guys haha

  3. Kurt Ernst says:

    Taylor, good points all. Still, there has to be a point for each of us when by choice (sheer outrage over price gouging) or by necessity (no money to pay for gas) we give up or seriously reduce our driving.

    I can live on ramen, and there’s plenty of fruit trees and wild game down here…

  4. Kurt Ernst says:

    Richard, don’t you guys get nailed with taxes when you buy a car as well?

  5. Richard says:

    Kurt, we do get nailed yes.. And hard haha

    They’ve changed the rules a bit sinds 2010 but it’s still a lot of tax to pay. It starts with the tax for cars and motorcycles. (BPM in dutch) which is like 27% percent or something of the cars catologue price.
    Then they look at how “green” your car is, the less Co2, the less you pay in taxes.

    And then of course you get the value added tax.. Mind you, this is al on the cars catlogue price. It’s not like they charge tax on tax on tax. Bet they would if they could haha.

    And then of course you’ve got your road tax and the taxes on gas (that’s what is pushing us to the 7,50 a gallon)

    So yeah, we kinda get screwed haha..

    There was a hype couple of years ago to buy an expensive car in germany, strip al the expensive parts and goodies so it looks like a base model, import it in to the Netherlands. Pay the taxes, which are lower because they cant charge you for the luxury stuff that’s not in there and then build al the stuff back in.. Can save you a couple of grand on a car..

    Well, that was a way too long post haha.. Sorry for any mistakes in the spelling!

  6. Kurt Ernst says:

    Damn, Richard, I’m sorry. I can’t imagine having to pay a 27% tax on cars, or having to pay $7.50 per gallon for gas. Ever think of buying a summer place in the US, just so you could drive an expensive car fueled with (relatively) cheap gas?

  7. Richard says:

    Well, the 27% can get more or less, depending on if it’s diesel, gasoline or LPG (dont if you guys call that te same over there) and some othere options.

    Wish i could buy a place over there! But as a 20 year old student, i’ll have to postpone that a bit.. I am coming over next summer though, planning on renting a Harley and ride around for a week or so!

    Plus, im trying to save up for a ’68 Charger.. Imagine running that thing over here! Ah well, it’s a hobby, it’s supposed to cost money right?

    Maybe is should drop by Mr.Angry nex summer, right? haha

  8. […] matter that the gasoline already in the system was refined when oil was less expensive; what […]Read more… Categories: Uncategorized Tags: Holden Commodore Coming, NSX, Spyder Performonte, Super […]

  9. Set says:

    I never worry about the price of gas. That’s what my diesel Beetle is for.