Gas Is More Expensive, But Still Cheap

Though Americans are complaining about rising gas prices, demand has barely budged. And when adjusted for inflation and considered as a percentage of household spending, prices are still below the peaks in the 1970s and 1980s.

"Gas prices have climbed the last three months and now top $3 a gallon in many places. That's putting pressure on household budgets as Americans head into the summer vacation driving season."

"[But] in fact, motorists are spending less -- on an inflation-adjusted basis -- than they did in March 1981, when prices reached a record high.

Also, as a percent of household spending, gas is a better deal now than then.

Gasoline and oil purchases accounted for something more than 3 percent of spending in 2005 and 2006 -- down from the high of 5 percent in 1981, according to the U.S. Commerce Department."

"Want gas prices to fall? Use less.

"If half of American drivers pledged, and followed up on the pledge, to use one gallon less gasoline in the month of June, the market would plunge," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J."

Full Story: As prices rise, gas still a bargain

Comments

Comments

Irvin Dawid's picture
Correspondent

VMT data presented here doesn't account for recent drop-off.

"Gasoline and oil purchases accounted for something more than 3 percent of spending in 2005 and 2006 -- down from the high of 5 percent in 1981, according to the U.S. Commerce Department." This was news to me, and should be stressed whenever discussing today's "high price of fuel" as well as the fact that today's high average gasoline price of $3.22/gallon is still 9 cents lower than March, 1981, when inflation-adjusted.

However, the article doesn't recognize the RECENT drop in VMT (“The average American motorist is driving substantially fewer miles for the first time in 26 years because of high gas prices and demographic shifts, according to a USA TODAY analysis of federal highway data. The growth in miles driven has leveled off dramatically in the past 18 months after 25 years of steady climbs ...." *

Instead, it compares today's VMT to seven years ago: "A look at the total number of miles traveled by vehicles in the United States shows a jump of nearly 13 percent between the first three months of 2000 and the corresponding period this year, according to the Federal Highway Administration..."

* "Americans Continue To Drive Fewer Miles In 2007",
http://planetizen.com/node/24572

Happy motoring :-)
Irvin Dawid, Palo Alto, CA

Cutting Back Because Of High Gas Prices

An article in today's NY Times says that Americans are beginning to cut their driving because of high gas prices, and that gas prices will remain high because of limited refinery capacity; oil companies hesitate to invest in refinery capacity because of the push for biofuels.

from http://www.nytimes.com/2007/05/24/business/24refinery.html?_r=1&oref=slo...

Some consumers, meanwhile, are trying to drive less or are simply absorbing the higher cost. “I’m already driving the minimum,” said Dennis Zygnowicz, 51, of Garden City, Mich., who recently stopped at a Shell station and paid about $12 to put less than four gallons in his GMC Jimmy. “The only way I could do any less would be to ride a bike.”

Another driver, Tamar Bittelman, a kindergarten teacher from Berkeley, Calif., says her daily commute gives her little choice. “It’s unbelievable to me how much I’m paying for gas,” said Ms. Bittelman, who recently paid $3.56 a gallon to fill her 1998 Subaru Legacy wagon. “I’m just much more aware of how much every trip to the grocery store is costing us.”

Hmm: "The only way I could do any less would be to ride a bike." Why haven't I ever thought of that?

Charles Siegel

Daniel Lerch's picture

High gas prices, oil production and driving

ASPO-USA (Association for the Study of Peak Oil and Gas) recently posted an article on the recent developments in gas prices and oil production, and the effect (or lack thereof) they're having on driving.

It's an interesting interesting look at an issue familiar to planners, but through the eyes of a different field (i.e., energy/oil).

http://www.aspo-usa.com/index.php?option=com_content&task=view&id=135&It...

http://postcarboncities.net/node/201

Daniel Lerch's picture

High gas prices, oil production and driving

Related to this, ASPO-USA (Association for the Study of Peak Oil and Gas) recently posted an article on the recent developments in gas prices and oil production, and the effect (or lack thereof) they're having on driving.

An interesting look at an issue familiar to planners, but through the eyes of a different field (i.e., energy/oil).

http://www.aspo-usa.com/index.php?option=com_content&task=view&id=135&It...

http://postcarboncities.net/node/201

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