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Much Ado About Gas Prices 766

markmcb writes "It seems that a week cannot pass without finding big news about gas prices. They're up, they're down ... but why do we care so much? OmniNerd posted an article that aims to put gas prices in perspective. The author takes a look at other commodities and their price variances and applies some simple math in order to make the claim that best-gas-price-hunting is an effort that could be better used on other products. From the article, 'Why the disproportionate emphasis on gas prices in our culture, then? Although some cite a failure of politicians or media populists to account for inflation and purchasing power changes, I think it is simply because gas prices are in your face.'" IMO, the other side to the price of gas is that, especially in developed countries, it has a pervasive effect throughout all layers of the economy — food prices (because of the trucking), schools (busing), etc., etc.
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Much Ado About Gas Prices

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  • by suso ( 153703 ) * on Monday September 18, 2006 @09:06AM (#16129287) Homepage Journal
    Perhaps the size of the price sign is what matters. Gas prices are shown in large high contrast fonts on every street corner. The price sticker on a bottle of shampoo is less noticeable or sometimes not noticeable at all. You just pick it up and put it in your cart.

    In mathmatical terms, figuring that the price sign at a gas station is about 6 feet by 4 feet, and the price sticker on a shelf for a bottle of shampoo is 2 inches by 1 inch, the gas station sign is about 1,728 times larger and thus more emphasis is placed on the price of gas.
    • by gfxguy ( 98788 )
      Good point.

      Another problem is that it's a big deal because the media makes it a big deal.
      • by suso ( 153703 ) * on Monday September 18, 2006 @09:15AM (#16129343) Homepage Journal
        Another problem is that it's a big deal because the media makes it a big deal.

        And the media makes it a big deal because the status quo for intellegence is not very high. Average Joe customer simply sees things on the surface and doesn't do any deep thinking. I remember hearing someone that I know say "I guess buying a diesel car is the way to go". No doubt he simply thought that because the price of gas on diesel cars was advertised as a few cents cheaper per gallon at the time. Now, its the opposite. And I don't know this for sure, but aren't diesel cars more expensive? If that's the case then you'd be losing money overall.
        • Re: (Score:2, Informative)

          by emamousette ( 871456 )
          Modern diesel cars (on average) tend to get slightly better mileage per gallon of fuel. That would be more of a cost savings over gasoline fueled cars as well.
          • by Pope ( 17780 ) on Monday September 18, 2006 @09:36AM (#16129501)
            Not slightly, diesels get better mileage per litre/gallon, period. Of course, diesel fuel having more energy per volume of fuel also helps...
            • Re: (Score:3, Informative)

              by tylernt ( 581794 )
              It's easy to do a cost-benefit analysis, calculating the number of miles you drive and finding out how much you save per year with diesel's better fuel economy in spite of its slightly higher fuel price. Then you compare that with the extra money you will spend on a diesel car, to see when you will break even and when you will start saving money with a diesel. I did it in an OpenOffice spreadsheet in about 10 minutes (and yes, my diesel is saving me money despite my low annual mileage).

              All things taken into
        • by GundamFan ( 848341 ) on Monday September 18, 2006 @09:25AM (#16129422)
          The trick with small block diesel engines is that they get a much better MPG rating on average so even if diesel fuel is more exspensive than gas per gallon you still come out ahead, plus most new diesel cars (VW Auto Group TDIs anyway) are being built to run on bio-diesel without any conversion.
          • by Squalish ( 542159 ) <Squalish AT hotmail DOT com> on Monday September 18, 2006 @01:35PM (#16131537) Journal
            The only incompatibily is natural rubber fuel hoses (phased out 20 years ago for economic, not green reasons), which biodiesel tends to eat away.

            In hot climates, B100 is pretty much a drop-in replacement, with one catch: it'll eat away built up corrosion from years of petrodiesel, causing your fuel filter to clog up initially.

            Straight vegetable oil (SVO) works as a fuel, but needs to be at high temperature to have the necessary viscosity, and engines need to be modified with heaters. We fix that by transesterifying it with methanol and turning it into biodiesel. This still doesn't have the cold weather ease of use of petrodiesel, though.

            The only major issue with pure biodiesel is that its gel point is in the neighborhood of 25-30F, resulting in fuel lines that clog. For people who will be operating in subfreezing weather for significant amounts of time, various additives are available, including basic petrodiesel (this is why B20 is so much more prevalent in the US than B100). For subfreezing weather over an entire season, an electric heater system is highly recommended - there are already products available tailored to extreme low temperature petrodiesel use.
        • by gfxguy ( 98788 )
          Diesels tend to get better mileage, though. The price difference at the pump is meaningless. Here's a comparison for the Jetta Sedan versus the Jetta Sedan TDI (city/highway):

          Jetta Sedan 2.0T: 24/32, MSRP: $24,220
          Jetta Sedan TDI: 36/41, MSRP: $22,935

          There are other slight differences, I suppose. Prices from CarsDirect, but MSRP is MSRP.

          One problem Americans have is that the regular sedan is 200HP, the TDI is 100HP, but the TDI provides 177 ft. pounds of torque, only 30 less than the the 2.0T, and MORE th
        • Re: (Score:3, Informative)

          by ajs318 ( 655362 )
          One litre of diesel fuel contains more joules of energy than one litre of petrol (gasoline). However, in order to burn it fully and so release all that energy, it requires more air. Diesel engines therefore have larger displacements than equivalently-powered petrol engines; a runabout that ordinarily has a 1.2 petrol engine might have a 1.6 or even 1.8 in its diesel counterpart.

          Although the extra cubes make it sound as though a diesel engine ought to use more fuel, this is not the case since the fuel-a
    • by Benwick ( 203287 ) on Monday September 18, 2006 @09:23AM (#16129401) Journal
      Yes, and most people use about 14 gallons of shampoo for every three hundred miles they walk.
    • Re: (Score:3, Insightful)

      by corran567 ( 857209 )
      I always hear about people complaining about gas prices. Then someone always makes the comparison that a cup of coffee at starbucks is like $10 a gallon so gas is relatively cheap. To that I say so what. I don't need to buy 15-20 gallons of coffee a week, but I do need 15-20 gallons of gasoline a week. The complaint is that gas prices go up 5 cents and people freak out. Well, 5 cents * 20 may only be $1 more a week. But then next week it goes up again. Here in the US (I know prices are better here than most
  • by avij ( 105924 ) * on Monday September 18, 2006 @09:08AM (#16129293) Homepage
    The average price for a gallon of gas in that article was about $2.90, give or take a few cents.

    Here in Finland a litre of 95 octane gas costs about 1.263e [] (1.295 for 98 octane and 1.008 for diesel).

    1.263e / litre = 4.7809751e / gallon = $6.04697 / gallon

    And you are complaining that gas prices are high? Well, at least these prices are a good incentive for me to use public transport..
    • Wish we *had* public transport to use.
      • by GigsVT ( 208848 ) on Monday September 18, 2006 @09:15AM (#16129337) Journal
        Would you pay $6/gallon for gas to support the taxes required for all those socialist services?
        • Re: (Score:2, Informative)

          by bhima ( 46039 )
          I do and I do so happily.
        • by Don853 ( 978535 ) on Monday September 18, 2006 @09:27AM (#16129435)
          I would gladly pay $6/gallon if it would get all the jackasses driving Yukons with one passenger off the road. The public transit would be nice, but it would require everyone to not live on 3/4 acre in a development 35 miles from the center of the city for it to be even plausable.
          • by szembek ( 948327 ) on Monday September 18, 2006 @09:55AM (#16129646) Homepage
            You speak as though 3/4 of an acre is a large lot. It's a decent sized yard at best. 1 acre is the smallest lot I'll even consider when looking at houses. It's a luxury of living in the large nation that we do. We don't have to be crowded into small spaces in dirty cities. We can choose to live in comfort and have some space for kids to enjoy, and to build shit on.
            • Re: (Score:3, Insightful)

              by jfengel ( 409917 )
              The downside from those large lots, as it relates to the price of gas, is that neighbohoods built that way essentially preclude public transportation. Things are too spread out to make public transportation economical because each bus stop would service only a few people. And essential services, like the grocery store, will be too far away to walk to, so you end up having to have a car for everything; even a stay-at-home spouse must have a car.

              But clearly that's the way many people like to live. I've got my
            • Re: (Score:3, Funny)

              by houghi ( 78078 )
              Yeah, compare that the the overpopulated country of Finland. No space ther to build anything. That is why their phones are so small.
        • by AusIV ( 950840 )
          Not quite. I suspect by removing some middle men, public transportation saves a relatively significant percent per gallon.
        • Would you pay the taxes to subsidize the petroleum indestry, so they only have to charge you $3/gallon at the pump?
        • by Crazy Man on Fire ( 153457 ) on Monday September 18, 2006 @10:45AM (#16130020) Homepage
          Would you pay $6/gallon for gas to support the taxes required for all those socialist services?
          Don't think for a second that gas is actually cheaper than $6/gallon here. In other countries, they pay the actual cost at the pump. Here in America, we pay part of the cost at the pump and pay the rest in taxes and national debt. Have you been paying attention to the billion dollar tax breaks and incentives that the government gives out to the oil companies? Where do you think that money comes from? That's right, the taxpayers (of today and tomorrow)!
    • Re: (Score:3, Insightful)

      by sixintl ( 956172 )
      European cars get better mileage and it is easier to live without a car there than it is in the US, where every store is a 20 minute drive away and there is only the barest shell of viable public transport. A lot of this is due to the political landscape in the US which is extremely friendly to large auto and oil corporations, but maybe this will change as gas prices inexorably continue upward and people start asking for change.
      • by lucabrasi999 ( 585141 ) on Monday September 18, 2006 @09:48AM (#16129586) Journal
        European cars get better mileage and it is easier to live without a car there than it is in the US, where every store is a 20 minute drive away and there is only the barest shell of viable public transport.

        In most Western Countries, you can choose where you live. I could have chosen to live within the City Limits, where the store is within walking distance (and public transportation is actually quite good). Instead, I chose to build a house in the suburbs. It is MY OWN DAMN FAULT that I now have to pay $50 a week to fill up my Ford Escape. And, my wife and I chose to purchase a fuel-efficient Mazda 3, because her new job had a very long commute.

        If you feel that the stores are too far away, then either move to a new house (closer to the stores you shop at), or buy a more fuel-efficient car.

    • by LaughingCoder ( 914424 ) on Monday September 18, 2006 @09:28AM (#16129444)
      I'll see your price-per-gallon math and raise you some proportional-area math.

      The US is 3,537,438 square miles (land). Finland's is 305,470 (land). So, the US driver must cover 11.58 times as much area. Now that works out to a proportionate gas price of $6.04 / 11.58, or $0.52 per gallon.
      • by cs02rm0 ( 654673 )
        Good job people tend towards urbanisation then isn't it.
      • Re: (Score:3, Insightful)

        by Alioth ( 221270 )
        What bizarre logic.

        Most people's daily drive is roughly the same however large the country they live in. To take an extreme example, I used to live in Houston, Texas. My commute was 5 miles each way. I drove about 8000 miles a year.

        I now live in the Isle of Man - the *entire* island could fit inside the area of greater Houston. I drive around 12,000 miles a year - my commute is now 12 miles each way, and I do more longer journeys by car (up to 30 miles each way).
    • In the U.S. everything is much further away than in Europe. I travel about 5 miles (~8 km) to go to the grocery store, 25 miles (~40 km) to go to work everyday, and the nearest convenience store is at least 1/2 a mile away. I can hardly walk anywhere. And there is no reliable, decent public transportation, at least not in my city.

      That being said, for your Americans going 'wow!' at his countries gas prices, realize our gas prices are a direct result of our government's subsidizing of the oil industry. It
    • Here is south eastern Canada prices in my area fell to 95 cents/litre for regular fuel from a high of about $1.20 ($1.35 last year after Hurricane Katrina), everyone is really happy! I use diesel, it's about the same but a few years ago it used to be 30 to 40 cents cheaper.

        btw the other day I bought some printer ink which works out to approximately $30,000/US gallon.
  • Exxon Mobile (Score:4, Insightful)

    by eldavojohn ( 898314 ) * <(eldavojohn) (at) (> on Monday September 18, 2006 @09:08AM (#16129300) Journal
    It seems that a week cannot pass without finding big news about gas prices. They're up, they're down ...
    They've been in the news because they've only been going up up up until very recently. They were also in the news because idiots were 'predicting' that they would hit $5 a gallon after Operation Iraq Freedom.

    This article is just a very vigorous proof that you're an idiot if you spend any time at all searching for the cheapest gas. We all know that some gas stations don't follow the unspoken price rule where you don't undercut your competitors and they won't undercut you. Some people must feel very smart finding those gas stations. How much gas they waste getting to them might be interesting to compute also. Oh well, as long as it makes you feel good inside.

    I remember when Exxon Mobile reported the largest profits ever received by a company in a single quarter. While they were raking in that dough, they were telling me that hurricane Katrina and the war had left them with no oil at all. They warned me gas prices were going to go up. Then why the hell did they make record profits?

    What I would like to read an article [] about what the hell happened with the congressional hearing [] that was supposed to investigate Exxon Mobile? And we're subsidizing gasoline companies [] through preferential tax codes? Am I the only person wondering what is going on here?
    • Re: (Score:2, Funny)

      by Anonymous Coward
      What's the Exxon Mobile? Is that like the Popemobile but for the Exxon-Mobil executives?
    • Re:Exxon Mobile (Score:5, Informative)

      by Anonymous Coward on Monday September 18, 2006 @09:23AM (#16129404)

      Beware: Economics follows.

      The demand for gasoline is relatively inelastic. If you raise the price, demand does not fall all that much. So, raising the price often means you would make more money. It's a typical monopoly tactic to restrict the supply of something and artifically raise the price against an inelastic demand, and thus gain more revenue. (See also: Windows.)

      If anything, the higher profits associated with this price of gas after the hurricane (when supplies are lowered by other forces) should demonstrate that under normal conditions, the industry is actually fairly competitive, and you're paying a relatively fair price for your gasoline. (Well. Aside from taxes.)

    • by jedrek ( 79264 )
      I'm a gas price shopper, over here in europe. You better believe that if it takes me an extra 1-2km to save 40cents (US) on a galon of gas, I'm gonna make that drive.
    • Re: (Score:2, Informative)

      by gorbachev ( 512743 )
      "Am I the only person wondering what is going on here?"

      No, you're not.

      The US Government gave oil companies a multi-billion dollar subsidy just after the Katrina hurricane. The oil company lobbyists claimed the hurricane had had a disastrous affect on the oil companies. The next quarter the oil companies, all of them, announced record profits. Profits that were bigger than any other company in the history had ever made in a quarter.
      • Economics lesson (Score:3, Insightful)

        by paranode ( 671698 )
        Companies set prices by margins. You pay X for your supply, mark it up Y% margin, and profit Z when you sell it. It doesn't take a genius to figure out that when the price of X goes through the roof, Y% stays the same (which it did in the oil business, margin was around 10% which is actually lower than many industries), then Z goes up as well.

        People who complain about this are either ignorant or anti-capitalist. Just be honest about which one it is.
    • Pump Fraud (Score:3, Interesting)

      This article is just a very vigorous proof that you're an idiot if you spend any time at all searching for the cheapest gas. We all know that some gas stations don't follow the unspoken price rule where you don't undercut your competitors and they won't undercut you. Some people must feel very smart finding those gas stations. How much gas they waste getting to them might be interesting to compute also. Oh well, as long as it makes you feel good inside.

      Strong words...... but there is a grain of truth in th

    • Re: (Score:3, Insightful)

      by UbuntuDupe ( 970646 )
      And we're subsidizing gasoline companies [] through preferential tax codes?

      I've always heard people argue about "subsidies" to oil, and they always fall through on closer examination.

      I read the article, and it's more of the same. Let me give a brief refutation.

      1) Tax benefits: it alludes to certain exemptions, but doesn't actually name any of them, so I can't quite respond. It then claims states tax gasoline less at the pump, but the average federal+state take (which isn't applied to other produ
    • Re:Exxon Mobile (Score:5, Insightful)

      by toetagger1 ( 795806 ) on Monday September 18, 2006 @09:37AM (#16129508)
      If you can make 1,000,000 gallons of gas a day, and demand is 1,000,000 of gas at $1.25 each, then you will have sales of $1,250,000.

      Now, if demand increases, but you can still only make 1,000,000 of gas a day, you have to adjust your price such that the demand is at 1,000,000 gallons a day again. Today, that price is around $2.85, and the company now has sales of $2,850,000.

      If you pay attention, you will notice that even so sales more than doubled, they didn't have to spend or invest any more money to do so.

      The reason why this works is because of the lack of investment in new capacity development. The only reason why this is the case is because of the lack of competition. Everyone in the industry knows they make more money by not investing (in order to increase price), than by investing billions to increase capacity at lower prices.

      So if you want to have lower oil prices, get writ/weaken OPEC first. Then break up some of the oil industry by seperating crude extraction from refining (break up the vertical monopolies), and then let the free market do its job.
    • by AusIV ( 950840 )

      Some people must feel very smart finding those gas stations. How much gas they waste getting to them might be interesting to compute also. Oh well, as long as it makes you feel good inside.

      I've seen the extremes for this. My father will sit and calculate the costs using his gas mileage, the distance between stations, and the difference in gas prices, then considers how much the farther gas station is worth the extra time to drive, and in most cases goes to the closer gas station anyway. My girlfriend, on t

  • The other main reason for the focus on gas prices: the short-term demand is not affected substantially by changes in price. Thus, these changes must simply be absorbed until technology or capital investments can catch up with the changes. Price volitility further compounds the problem because of the high capital costs of changing behaviors to converse gas, meaning those investments are unlikely to be made unless the price variations are percevied as indicitive of lenger term trends.
    • by TopShelf ( 92521 )
      What you're saying is largely true, but what I find interesting is a lack of behavioral change to even attempt at alleviating the cost pressure in the short term. For instance, I haven't seen any indication of an increase in carpooling over the last year or two, despite the fact that most Americans have a pretty lengthy commute to work.
  • Hogwash (Score:4, Interesting)

    by gr8_phk ( 621180 ) on Monday September 18, 2006 @09:10AM (#16129308)
    the claim that best-gas-price-hunting is an effort that could be better used on other products
    I'm not a gas-price-shopper, but I know several people who are. It actually takes zero time to do since you're driving past all the big price signs on the way to and from work every day. To say the effort could be better used somewhere else is silly. Sure, people should make an effort for other products, but that would require... effort!
    • I thought the article would recommend a new air filter, or some great fuel efficiency boosting fuel additive.

      Instead it was about saving money on peppers, the kind you eat, at Kroger... Damn, why did I waste time I could have used hunting for cheaper gas to RTFA!
    • by lbrandy ( 923907 )
      I'm not a gas-price-shopper, but I know several people who are. It actually takes zero time to do since you're driving past all the big price signs on the way to and from work every day. To say the effort could be better used somewhere else is silly.

      Bunk. Everyday I drive to work I ignore gas signs because I'm busy trying to unify physics or prove the Riemann hypothesis. So close....
      • Re: (Score:2, Funny)

        by Anonymous Coward
        Hi, its the guy who drives in front of you everday on your commute. I wish you would concentrate not on gas prices or physics, but on the road instead before you prove the "unified car theory" in a massive particle collision.
    • Re:Hogwash (Score:5, Insightful)

      by gEvil (beta) ( 945888 ) on Monday September 18, 2006 @09:27AM (#16129440)
      I'm more shocked by the people who bitch about gas prices while chugging away on their third $4.00 cup of Starbucks that morning.
  • by forgotten_my_nick ( 802929 ) on Monday September 18, 2006 @09:10AM (#16129309)
    The point that wasn't put forward so well in the article is that the Gas price can change everything.

    Your shopping for example will go up in price as it costs more to transport it. Your electricity/gas at home can go up in price too.

  • by autophile ( 640621 ) on Monday September 18, 2006 @09:10AM (#16129310)
    It's not just mommy and daddy filling up the family sedan. It's everything that depends on petroleum products. Asphalt, for example. Heating oil. Plastics. And, as the summary points out, transportation of *everything*.

    Gas prices is one of those easily understood metrics that happens to affect everything we do (in developed countries).


  • Gee here's an idea (Score:2, Insightful)

    by Anonymous Coward
    Because pointing out a 40% jump in gas prices is startling to people who are bad at math and don't track their expenses very well?

    Maybe if they made headlines like "gas prices jump enough to force you to cut back on 1 Starbucks grande per week to break even!" people would understand the implications a little better?
  • TFA is noting a behavior of looking around for the cheapest gas station. That is, driving 10 miles to save a nickel a gallon on gas.

    It's not talking about how gas went from $1.50 a gallon to $3.20 a gallon in the span of two years or so, and how that has impacted people's decisions.
  • Isn't it obvious? (Score:5, Insightful)

    by l4m3z0r ( 799504 ) <> on Monday September 18, 2006 @09:14AM (#16129334)
    The reason we care so much is that many of us spend more on gas than any other commodity. We consider it as essential as food. And its price varies wildly from season to season. I spend roughly $300 US each month on gas currently, and when it was higher you bet your ass I cared that I was spending an extra $50 a month.
    • Re: (Score:3, Insightful)

      by Keebler71 ( 520908 )
      Some back of envelope calculations: Assuming $3/gal you are using 100 gallons a month and assuming that you get 25 mpg and that 90% of your driving is commuting to and from work, you must have a daily commute of about 112 miles (56 miles each way). This costs you $300. My question for you is you have clearly chosen to work far from your place of residence. This was probably either to a) get a better paying job -or- b) live somewhere more affordable. Are you making/saving more with this arrangement than
      • Re: (Score:3, Insightful)

        by l4m3z0r ( 799504 )
        You make 3 assumptions and I only consider one of them to be right. $3 gal is the one I'd consider "right". I get 31mpg average in my car, and only ~50% of my driving is commuting to and from work. My commute is 82 miles(41 each way).

        I'm definitely saving more by doing this commute rather than moving closer or getting a lower paying job, but that wasn't the point of my post. The point is that when I pass one gas station that says 2.90 and the next one says 2.94, I make sure I get gas at the one thats
  • by Anonymous Coward on Monday September 18, 2006 @09:15AM (#16129340)
    Expect gas prices to continue to decline up to the November elections. Oil companies will forgo the profits short-term in order to give oil-friendly Republicans a better shot at the polls.

    After the election, look for a price spike, probably blamed on increased heating demand and Middle East instability.

    And no, you can't have my tinfoil hat.
  • It seems to me that the only thing he proved was that shopping at Wal-Mart instead of buying all your "pharmacy items" at the local pharmacy will save you more money than finding the cheapest gas station.

    This is neither a surprise nor relevant.

    Sure, some people go overboard by going out of their way for a station that's 2 cents cheaper, but in my area, a 1/2 mile drive up the road to Valero saves me an average of 10 cents per gallon over the Mobil and Citgo stations next to my house. $3-$5 a month isn't sup
  • Many of the assumptions made in the article are not valid for many people. For example, I know that the gas station two blocks from my house, in the center of town, is at least 25 cents more expensive per gallon (and has been as high as 32!) than the one 2 miles outside of town. This is enough of a price disparity that I will always go to the cheaper station. Additionally, since I know that the other station is always going to be cheaper, I don't really spend any time searching for it; I know its there, and
  • I'll tell ya... (Score:4, Insightful)

    by s31523 ( 926314 ) on Monday September 18, 2006 @09:16AM (#16129351)
    As Americans, we are spoiled!
    We are accustomed to cheap gas and all its by-products (heating oil, propane, electricity, etc.) for some time now. So much so, that we take it for granted. On top of that we extend ourselves to the max, getting credit cards and running up debt like crazy. So, when all of sudden this cheap energy source doubles in price and now stresses everyones budget, we scream foul. That is why gas prices are so closely watched and such a hot topic. We can afford the spike. Other countries have dealt with high energy prices by promoting mass transit, build more efficient cars, etc. But we just can't relate.
  • by moehoward ( 668736 ) on Monday September 18, 2006 @09:18AM (#16129366)

    The same ridiculous politicians who whine about gas prices are the same ones who allow it to be priced in tenths of a cent. I just find that rather humorous. Maybe because it is also the same politicians who are crying to get the penny taken out of currency circulation.

    Anyway, all the space on those gas station billboards being take up by "9/10s" could be put to much better use advertising cigarettes.

    To sort of answer the question, though, rising gasoline prices act like a tax in the economy, not inflation. Inflation is defined as an increase in available cash in the economy, usually as the result of the govermnet putting more of it there to cover rising prices. Gas is a rare economic beast because it is involved in the price of EVERYTHING you pay for due to transportation costs. And also it is non-elastic in a major way.
  • buy cars with better gas milage FTA
    and the average gas mileage of a new, light-duty vehicle was 21 mpg
    My J reg Mercedes 190 is renown as a gas guzzler and gets 30mpg. If I were looking for a new car I wouldn't dream of looking at anything that got less than 35mpg. OK, so I know we have bigger gallons (20 fl oz vs 16 fl oz) but, from a UK perspective, 21mpg is only achieved by buying an SUV, and, if you want to buy a Chelsea tractor, pay the price.
  • by Churla ( 936633 ) on Monday September 18, 2006 @09:20AM (#16129387)
    Gas prices are driven because of the spot market on oil, and the way it's basically a "futures market".

    American consumers don't have to deal with the extreme volatility that is involved with such a rampantly speculative market on a day to day basis, EXCEPT when it comes to gas prices. This makes them a lot more visible than other speculative swings.
  • by RingDev ( 879105 )
    It's not so bad, prices are set to decline and stay 'lower' for a while... like until November.

    Nothing like an election year to get incumbents to make hot ticket issues temporarily disappear. Also, expect a sharp rise in fuel costs come December due to a "heating oil usage spike" and "conversion to winter fuels" coupled with the "winter travel season" and rise in demand from "winter recreation vehicles". You likely won't see "lack of political pressure" as a reason for higher prices though.

  • but.... (Score:2, Insightful)

    by TheDrewbert ( 914334 )
    how much gas did he waste by driving around to different stores to do this article? It's rather simple: 1. Combine trips to stores. 2. Use the bus/public transit for work commutes. 3. Use something like (my area) to find the cheapest gas within a 5 miles radius. Check frequently. 4. Don't drive your car like you stole it. See a red light far up ahead? Coast into it. I have two vehicles, use the bus to commute to work, and consolidate my trips as much as possible. I fill up each v
  • I give the author credit for doing his research and coming up with the math, but I think he completely misses the point. He asks "Why the disproportionate emphasis on gas prices in our culture, then?" Maybe because:
    • Gas prices at one point had nearly quadrupled in my area in a four year period
    • The long-term oil supply is diminishing
    • Developing countries are using more oil
    • Americans have been buying larger vehicles that consume more fuel
    • Oil has uses other than powering our vehicles, such as heat and man
  • by Se7enLC ( 714730 ) on Monday September 18, 2006 @09:26AM (#16129432) Homepage Journal
    The article basically says that if you put effort into comparing prices of every other purchase, you could save a lot more money. Here are some of the reasons why people shop for good gas prices and not other things:

    1). Everyone needs gas. A lot of it. Sure we all need red peppers, but not $50 a week in red peppers. The more money something costs and the more frequently we buy it, the more inclined we are to want to save money on it. And the more value. If you save $1 every time you buy 3 red peppers, is that really going to add up? You'd have to be a red-pepper fiend...

    2). Convenience. If Shaws, Stop n Shop and Market basket all posted the price of the items I typically buy on GIANT SIGNS I CAN READ FROM THE ROAD, I'd be much more likely to pick one store over another for that product. As it stands, by the time I get out of my car, get into the store, get a cart and go up and down the aisles to find what I need to buy, there's no way I'm going to go to another store to save 10 cents, or even a dollar. If I'd known before going in, I might have, though. I personally spend more money on gas than groceries, so it still makes sense.

    3). Free Money!. Cashback bonus cards give you money. It's free. Why wouldn't you want free money?
  • very sensible (Score:4, Interesting)

    by purplelocust ( 944662 ) on Monday September 18, 2006 @09:28AM (#16129445)
    This is consistent with what I observe- people spend too much time worrying about getting the lowest gas price, when there are many other fronts on which it would make much more sense to optimize. There are people who cross the George Washington bridge from New York to New Jersey to get gas at a lower price, when the cost of the bridge toll ($5) is typically well more than the savings (30 gallons of gas at $.15/gallon cheaper = $4.50, for example, and it is practically never a 15 cent difference or more)

    Some years ago, I remember a widely quoted congressman who was arguing against raising the US postage rate from $.25 to $.30 (they ended up raising it to $.29.) My belief was that it would be sensible to have $.30 postage, with $.25/additional ounce, to make the computations easy, and that it was ridiculous to have a $.29 postage rate with a $.23 marginal rate beyond the first ounce (how many people know their multiples of 23 and want to add them to 29?) The argument was the congressman made, which apparently resonated well, was that "people will drive halfway across town to save a penny on a gallon of gas (it was the late 80s or so) so we should do the same with postage." This pointed out several things vividly to a young me:

    1. people/congresspeople do not understand the difference in discrete and continuous commodities (stamps and gas)
    2. an argument doesn't have to make much sense for it to resonate with many people
  • by dpbsmith ( 263124 ) on Monday September 18, 2006 @09:35AM (#16129494) Homepage
    I believe it is the law (i.e. state law, but similar in most states) that gas stations post prices.

    We have an unusual situation here in that we have a commodity product--despite advertising efforts to the contrary, few motorists truly believe that it matters whether they buy Shell or Exxon--whose price is very easily compared.

    One of the odd features of life in the last few decades is that it is now apparently relatively cheap for companies to launch new products and product variations, and the result is that it is fairly hard to compare prices because it is fairly hard to find exactly _the same_ product in two different stores. The stores that promise to match other stores' advertised price on "the same" product are on fairly safe ground. Two supermarkets may both carry Jif peanut butter, but store A may carry Jif Peanut Butter and Honey but not Simply Jif while store B may carry Simply Jif but not Jif Peanut Butter and Honey. If they both carry the same product, they may not carry it in the same size; store A may carry Jif Crunchy Peanut Butter in the 18 oz and 40 oz size, while store B may carry only the 28 oz size, and so forth.

    My state requires unit prices to be posted on shelf labels, and even here the waters are muddied because it is very common to find that adjacent products on the shelf are unit-priced using _different units_ (fluid ounces vs. gallons, etc.)

    Generally speaking, it appears as if companies fight commoditization tooth and nail by doing everything they can to withhold real information from consumers and sell "the sizzle" instead. Whether the proliferation of huge numbers of product variations is a deliberate strategy to avoid price comparison I don't know, but it has that effect and I'm sure that corporations find it to be beneficial.

    Gasoline prices are one arena where information is available--as a result of government regulation, I believe--and you have something approaching a free market.

    Even here, of course, deception is possible. The Boston Globe recently reported that a number of gas stations have taken to calling 89-octane gasoline "regular" and 87-octane gasoline "economy" in hopes that inattentive consumers will inadvertently purchase a more expensive grade of gasoline than they meant to.

    (I say "something approaching" because, at least where I live, the number of brands of gasoline has dropped dramatically in the last twenty years, the number of independent stations relative to company-owned stations has dropped, and the percentage price difference between the cheapest and most expensive gasoline in the stations I drive by regularly has narrowed very considerably).
  • by BenjyD ( 316700 )
    and the average gas mileage of a new, light-duty vehicle was 21 mpg.

    Clearly no one in the US really cares about gas prices that much.
  • I'm not married to gasoline or other petroleum products as a long term transportation fuel source but I don't think the goal should be to shunt everyone onto public transport. The rich are always going to be able to pay for the convenience of private transport. Therefore, progressives should be working towards developing cheap energy sources that allow for the same thing for lower income folks. The value of personal transport for lower income folks is that it enables more means of self sufficiency. Here
  • Bitching about gas prices is like bitching about the weather. It's just a common topic for discussion that isn't likely to offend anyone.
  • Gas prices are an important (not exact) indicator of the future availability of energy supplies. A drastic shortage, if it occurs, will devastate the world economy. It is frightening that oil prices have risen so much, even with people taking Saudi Arabia at its word on their proven oil reserves. It is likely that the Saudi reserves are much less than claimed. See, for instance, New study raises doubts about Saudi oil reserves [] and Crude Awakening [].

    If the Saudi claims are debunked sufficiently to affect

  • Why the disproportionate emphasis on gas prices in our culture, then?

    The American psyche is centered on the idea (illusory or not) of freedom. And we have attached to that idea the symbol of the automobile. We have, as a culture, over the last 50 years or so, begun defining people by the car they drive. Men in minivans are whipped. Women in SUVs are lesbians. Everyone in a sports car is either wealthy or glamorous (depending on their state of obesity) or both. Big comfortable cars are called "luxury" car
  • One of them is mentioned by the editor who posted the story - the rising price of gasoline figures into the price of that shampoo (not to mention the price Average Consumer pays to drive to and from Cost Co).

    The other is that this article measures variation within different outlets in the same market, as opposed to in the same market over time (which is what people care about.) Since Gasoline is not regulated - but the prices *are* controlled by a ologopolistic cartel - you see more variation over
    • Re: (Score:3, Insightful)

      by bnenning ( 58349 )
      It's pretty clear that the oil companies are plotting to help their good friend Deborah Pryce (and the Republicans generally) in Ohio, but I don't quite follow how they arrange that.

      This is the left's version of intelligent design. Gas prices can't possibly be a result of decentralized market forces, there has to be a secret cabal determining what to charge in order to help Republicans win elections. Gas prices fall every single year at the end of summer. They've fallen especially rapidly this year because
  • Gas Guzzlers (Score:3, Interesting)

    by Doc Ruby ( 173196 ) on Monday September 18, 2006 @09:50AM (#16129606) Homepage Journal
    Oil still costs about $12:bbl to extract from the ground, and deliver to the refinery as it did in 2001. It still costs the same to refine it to gas and deliver it to your pump. But oil costs about $75 now, not $25. That means that we're not looking at just a tripling of price in 5 years, but rather almost five times the profit. While the rest of the country's economy, except for these energy corporations and banks, is stagnant or shrinking.

    When the biggest corporations are having the best years of their lives at the expense of the people having some of their worst years, we should be hearing about it. We should be hearing about it even more. Speaking of hearings, when Congress has hearings on the subject, they should put these oil corporation tycoons under oath, but they don't []. The CEO of Exxon/Mobil who was given the photo op for lying to the Senate was then given a $400 million bonus [] when he retired.

    Oh yeah, people talk about that, especially when they get laid off []. In a decent country, people would be talking about how those abuses led to the American oil/gas cartel getting broken up and reined in.
    • Re:Gas Guzzlers (Score:4, Insightful)

      by khallow ( 566160 ) on Monday September 18, 2006 @12:07PM (#16130725)

      Oil still costs about $12:bbl to extract from the ground, and deliver to the refinery as it did in 2001. It still costs the same to refine it to gas and deliver it to your pump. But oil costs about $75 now, not $25. That means that we're not looking at just a tripling of price in 5 years, but rather almost five times the profit. While the rest of the country's economy, except for these energy corporations and banks, is stagnant or shrinking.

      You're also paying for artificially tight refining capacity and the risk that something disrupts the supply chain. From what I hear, the cost of extraction may still be the same, but the quality of oil has declined especially in Saudi Arabia. That means higher refining costs before low quality oil meets the standards of oil traded at index price.

      The way to avoid price gouging at the gas pump is to lower the barrier to entry for refineries. The US government can contribute by cutting back on the regulation burden. Breaking up OPEC would also be nice, but I don't see anything with the power to make that happen.

      Finally, I don't see the point with the automobile layoffs. This was going to happen. The US auto makers aren't competitive in quality of product or labor costs. This is particularly true of GM which is most of the current run of layoffs. They've been bleeding market share for decades. Blame transference to oil might result in bad economic decisions by the federal government but it's not going to recover those jobs.

  • by evilandi ( 2800 ) <> on Monday September 18, 2006 @10:35AM (#16129920) Homepage
    TFA: According to the Energy Information Administration, the average cost of gas in the U.S. that year was $1.85 per gallon of regular grade4 and the average gas mileage of a new, light-duty vehicle was 21 mpg

    Okay, forget the rest of the damn article. Amercia, your problem is right there: MPG.

    Whilst American cars struggle to reach 25MPG, the average MPG of a European car is over 40MPG (source []).

    How can the country that has MIT have such crappy MPG? I mean, aren't you chaps utterly ashamed of your engineers? Forget saving money, just bring it down to technical prowess. Why aren't American engineering nerds hanging their head in shame?

    I have a 4x4 SUV that does better than 25MPG, not just on the motorway and country lanes, but on crowded higgledy-piggledy British towns. And it's a stupid 4x4 that I only really need in the winter! My mother's sporty saloon car does 45MPG. My wife's Volvo (read: APC with upholstery) does 35MPG. What the hell are you Yanks driving to need that much fuel per mile? Do you just grab a fire truck and bolt a couch to it, or what?

    (Even given 1 Imperial gallon = 1.2 US Gallons, your MPG still sucks, Amercia)
    • Re: (Score:3, Insightful)

      by Oswald ( 235719 )
      This is silly. The issue isn't our engineers, it's our preference in cars (You do realize that Ford owns Volvo, right?) . Even if we had NO auto manufacturers, Americans would have access to any model car in the world if they would only express a desire for it. It's the biggest automobile market in the world.

      Americans don't much give a shit about fuel economy, concentrating more on roominess (we're fat), torque (we don't know how to shift gears), and sheer intimidating bulk (we're aggressive drivers).

    • Re: (Score:3, Insightful)

      What the hell are you Yanks driving to need that much fuel per mile? Do you just grab a fire truck and bolt a couch to it, or what?

      That's pretty close. See for more details.

      And it's not an engineering failure -- more of a marketing problem. Or maybe a customer problem. I doubt that your 4x4 is a 9000 lb monster (643 stone for you) driven by a soccer (oops, football) mom (mum). Come to think of it, we're just applying the wrong solution to the problem of getting from here to there (fuel

    • Cars with 14 secs 0-60 don't sell in the US.

      It's more about what people buy than what can be engineered.

      And don't get too excited about your SUV. Your SUV getting 25mpg (Imperial) is only 21.2mpg US.

      So you're only the same as the US average you crap on. Well, if the average really were 21mpg. Which apparently it is (see updated link el_co.html [] there)

      I do think Americans should value mpg more. But we don't require it in this country, so people don't.

      When I n

"Yeah, but you're taking the universe out of context."