Sunday, May 18, 2008

Running The Math on Gas Prices

Being that regular unleaded gas is now at $4/gallon, or near enough to it, the price of gas is the issue du jour, I thought I should run the real-life numbers on my own driving, to see what real-life financial impact it has on me. I drive a lot, so the impact should be great. 

The last two years, I've averaged a bit over 30,000 miles/year. I drive a Toyota Corolla, with a five-speed stick. It averages 36 mph, so I stretch the dollar well. In fact, I've slowed down a lot recently, in an effort to improve the mph, but I'll calculate to averages I've actually logged.

So, more or less, I consumed 833.33 gallons of gas in the past two years.

At an average of $3/gallon last year, I spent $2,500.
At an average of $4/gallon this year, I'll spend $3,333.33.

I'm spending $833.33 more this year, or $16.02 a week.

$16 a week? Big deal!

Keep in mind that I drive 30,000 miles a year- for business. Most people drive a whole lot less than me. Before I was doing the kind of work that demanded I drive my own vehicle, I would average a little less than 15,000 miles/year. If that were still true for me, I'd be spending an extra $8/week.

So, why is this such a prominent issue? Is it because the gas stations are the only retailers stupid enough to continue to post their prices on large signs? 

The gas stations really do themselves a disservice with the price signs. I remember growing up in the 70s, when all manner of retailers posted their prices in their windows or on signs. The only ones who consistently do it today are grocers and the gas stations. They make themselves a lightning rod unnecessarily. But maybe they're doing us an even greater disservice. We're bitching about something that really isn't that big a problem, at the expense of examining some bigger issues. 

Our "electable" presidential candidates are talking up this issue, and I'm really not hearing enough about restoring the dollar, cutting the deficit without raising taxes, and the solution for our involvement in Iraq.

2 comments:

Jeffrey Quick said...

Odd to see you wanting less information in the market. That said, I don't get people who drive out of their way to save a penny or two on gas. There are 2 stations on my route to-from work that are usually 2¢ apart. Which one I visit depends on which direction I'm going, as on the way home, the cheaper one is difficult to leave in traffic.

Mike Kole said...

Want less info? Not exactly. Understand that the retailer has an advantage to not posting it so prominently, and don't understand why they fail to take advantage. I sure would.

Agree on the other. If I save 2 cents/gallon, I save 20 cents on a fill-up. Big deal.