Are you ready for $4 gas? We are, we live in NYC. You, however, might have a problem. Analysts are saying that $4 is a very real possibility this summer. From CNNMoney:
“I think it’s going to happen,” said Phil Flynn, a senior market analyst at Alaron Trading in Chicago. “Unless things change dramatically, I think we’re going to see $4 a gallon.”
“More and more communities are going to see gasoline that approaches or exceeds $4 a gallon,” John Kilduff, an energy analyst at Man Financial in New York, said recently. “Where we’re currently at with prices, that’s a given.”
Naturally, CNN also went out and found a guy who doesn’t think $4 gas will happen, so we can’t be sure what they’re saying is accurate or not….We’re simply left with an uneasy feeling that makes us want to buy things. —MEGHANN MARCO
Get ready for $4 gasoline [CNN]
(Photo:The BH)
More From Consumerist
-
Waste Not, Want Not: Montana Measure Will Allow Residents To Eat Roadkill
-
Comment Of The Day: Where Nobody Knows Your Name
-
Dr. Oz Is Still Handing Out Questionable Medical Advice That Critics Say “Borders On Quackery”
-
Flying The Friendly Skies Friday: The Happiest of Birthdays; Upgrades For Everybody
-
Hey, What Happened To All Of My iPhone Contacts?
@Shadgenki: What should we be outraged at? Our own conspicuous consumption?
Why the hell is bp and shell not using their slanty drilling method on venezuela, iran, and SA, its exactly like taking the oil right from underneath them…and if the caverns are non-symmetrical, then you can generally calculate to the earth’s core that the oil cavern would be on international soil at a specific depth…
Or, just nuke iran, sa, and venezula and just take their oil….
If it wasn’t for the buttload of money I was making off my oil stocks, I would be so damn mad at the current gas prices!
Since American consumers have been told by our dear CEO..er.. president that we need to spend our way to prosperity and not make any sacrifices for his little war, they’ll keep putting gas on the credit card until it’s maxed, then they’ll realize they’re upside-down in their SUV because they “bought” it on a balloon-note fake lease or a 7-year note and it’s taken an even worse hit on depreciation because it gets 15 mpg highway and some people woke up and realized this is wasteful. Look for a glut of cheap used Suburbans and Tahoes in a few years, and companies like Hyundai to be making tidy profits on efficient cars.
Uhm, yeah. In the San Francisco Bay Area, driving a car that requires 91 pretty much costs me $4/gal *now*. I only have to fill up once every two weeks, so I’ve been sucking it up.
Try driving a car in the UK, and then it won’t seem so bad here.
@shdwsclan: supposedly, the problem is not oil shortage. it’s a bottleneck in refining. we are producing at max capacity & recent happenings have pulled refineries off-line which has reduced supply in the face of increasing demand. when this passes, the reason will be the “seasonal move the higher ethanol content”, then “ramped up production of jet fuel for summer travel”, then “increased production of home heating oil means less gas for winter”.
I was originally going to drive to from Chicago to Orlando with my family this summer. Now, I’m going to drive to Peru. With lots of stops and starts.
Take that, Big Oil!
@radleyas: “I live in the UK. We pay the equivalent of around $9.00 for petrol.”
You have public transit.
@andyj76: “According to the IRS, the maximum US tax band is 35% and comes into effect at $336k. At $60k, a US citizen would be paying just 25%. Add on to that, the fact that goods from the US are charged at almost a £ per $ (ie. a $200 iPod costs us £200 or almost $400), and the tax burden in the UK is far, far higher than in the US.”
What nobody ever says when calculating these statistics is that IRS taxes DO NOT include state taxes (in my state, 3% flat on all income) and DO NOT include Social Security taxes. I’m self employed, so I pay the 15%ish SS tax instead of the 7.5%ish that others pay.
I’m in the 25% bracket, so my total tax burden on INCOME works out to 43%. (Well, a theoretical 43%. I haven’t worked it out with all the exclusions and deduction and so forth, which would make it less than 43% on gross income.) Some places also have county or city income taxes (I don’t have those); and most places in the US have property taxes. I don’t know how property tax works in Europe so I can’t say if it’s comprable; here I pay about 8% of the property’s assessed value every year in tax, but that varies a lot by state and locality.
—-
It’s no secret that Americans drive too much. But there’s not a whole lot we can do about 50 years of bad, sprawl-driven infrastructure planning as individuals. I don’t have a CHOICE about driving — there is NO public transit available to me, and there is NO pedestrian bridge across the river to my workplace. (The nearest bicycle-allowed bridge is about 8 miles downstream, I think, and the speed limit on the bridge is 55 mph, so it’s terrifying on a bike.)
My husband and I drive fuel-efficient cars, live in a densely-zoned urban area, can walk or bike to many amenities (although not the grocery store), and work 3 and 5 miles from home, respectively. $3 gas is STILL a huge bite out of our budget.
(And where I live, at least, we’ve also been bitten in the ass with soaring natural gas (for home heating) costs and a 55% increase in electrical costs as of January 1. Utilities are eating my budget alive. I can’t afford for gas to get in the act.)
I’ve lived in London. If we had that kind of public transit, I’d be all over that like white on rice, and if my gas taxes were FUNDING public transit, I wouldn’t complain one whit. But we don’t have public transit where I live and we’re not funding it.
@Buran:
The NHS is primarily paid for by income tax, which is also higher than America’s.
Also: “I drive a fuel-efficient vehicle”
“25 city/32 mpg highway? BRING IT ON.”
That doesn’t look like good fuel economy to me (in the UK). I don’t drive, but Dad’s large luxury car gets what he calculates as being 30 – 40mpg, but US gallons are bigger, so he gets slightly better than that sounds.
Most people I know with cars have small cars that get mid 40s.
@Eyebrows McGee:
“You have public transit.”
Indeed we do, and that is why I don’t drive.
@radleyas:
National Insurance is for State Benefits (Jobseekers’, State Pension etc.)
@foghat81:
Much less than Americans, in short. People are more likely to commute long distances if they’re commuting to London (hence the high average figure from radleyas), but out of the people I know, the one that drives the furthest to work does 23 miles (each way). My parents do about 8 miles (each way). Also, a much greater percentage of us live within easy walking distance of a convience store or take-away, and most supermarkets can be got to on foot. The parts of America I’ve visited, walking is not a viable means of getting anywhere, but I can easily live without any other form of transport.
The key metric for petrol price comparison is *not* price per unit. It’s cost over time. While gas in London may indeedgoes to cost $9/gallon, and one fills up once per month, total petrol expenditure is $108/month (assuming a 12 gallon tank). However, in San Francisco, as kimmie stated, 91 octane is $4/gallon. I live in San Francisco and have to fill up every 3 days, or 10 times a month (assuming a 30-day month), spending $45/tank or $450/month. That’s a fair comparison of petrol prices.
Hmmm…let’s see…the news media runs headline stories that read “OMFG, $4.00 a gallon gasoline!!!” So what do you think is going to happen? Traders are going to snap up gasoline futures in a panic, and presto…gasoline *does* go up to $4 a gallon because there’s a shortage rumor that causes a run on gasoline futures. I wonder who started those stories? I bet Exxon-Mobil has it’s own department of disinformation. I find it odd that whenever there’s a news story on why gas prices are going up, the futures market is seldom if ever mentioned as being a factor.
What kind of bonehead government lets sharks trade energy commodities that affect the livelihood of the economy and every single working family? (Yeah, I know, free market and all that..but really…aren’t billions of dollars of profit enough? Shouldn’t there be a limit the the amount of blood money oil companies and futures traders make?)
True, there doesn’t seem to be an awful lot of effort being put forth by anyone…either private individuals or the government.. to conserve. And there seems to be this idea floating around that everyone can afford to suddenly stop driving their mediocre MPG vehicles and buy shiny brand-new hybrids or that people can just stop driving to work. Unfortunately, the US infrastructure was based on the automobile and the availability of cars and reasonably priced gasoline. Sure, petrol is always $8.00 a gallon in Europe, but the whole infrastructure of most European countries includes extensive mass-transit, while the US never included that.
Why is there always an excuse? “OMG, we have a refinery down!!!” Two years ago, the excuse was “OMG, hurricane!,” then it was a bad pipeline, violence in Africa, we’re switching blends, we’re adding ethanol, storms in the North Atlantic, a plague of locusts..yada, yada, yada, yada. Oil companies know that the seasonal peak occurs at this time of year, but they seem to be intentionally dragging their heels to make sure inventory is lowest just at the time demand is highest. Hello, huge profits!
And yes, I agree..at least for commuting purposes, we need to move away from 15 MPG SUV’s and monster trucks and back to fuel efficient vehicles..but that’s only going to happen as people switch out vehicles. Nobody is going to just dump their big SUV tomorrow and take a $15,000 personal loss just to save $800 a year on fuel. The shift, if and when it occurs, is going to have to be a lifestyle shift, and those don’t occur overnight.
Simple fuel economy is not going to dramatically change the price of oil or gasoline any time soon. Oil is a commodity on the world market. China and India consume more and more each day. As demand rises, so do prices. The only way that changes is a practical route to an economy that is not oil based. Germany has made a substantial move in that direction. France has invested heavily in public transit and nuclear power. Japan has embraced public transit and high speed rail. It is the United States that lags behind. Where is the methanol fuel cell technology? How about a simple solar panel with more than a 20% photoelectric yield? America has done great things in the public sector. The interstate highway system and the space program are prime examples. It’s time to get moving, for the environment, for economic leverage, and for the wealth we hope to pass to our children.
Anyone need a used soapbox? I’m done.
$4 per gallon. Not yet… Elasticities… National avg peak at about $3.15 or so.
Btw the national average for yesterday was $3.05 with a slight downward trend forming.
@Eyebrows McGee: London has great public transport. I hate driving in London, the rules of the road are the complete opposite to the rest of the UK. It’s scary.
The public transport in London is fantastic. You can get everywhere on the bus and tube. I always try to travel by public transport when in London.
However, and here’s the problem; London is not the same as the UK. The public transport in the rest of the UK is absolutely terrible. There is no way for me to get to work every day by public transport without having to head in completely the opposite direction, only to change and head back again.
The public transport system here is very similar to the US system, it’s just on a smaller scale. Train lines between main cities (Amtrak), coaches (greyhound) etc.
It’s not viable for my 80 mile round trip per day. (not to London)
I did look for information on State Taxes on the IRS website where I found that info, but it didn’t mention it. If you are a self employed contractor here and you fall under IR35 (tax legislation to screw freelancers), then you end up paying almost 50% tax as you have to pay both Employer and Employee contributions. Council tax is based on the value of your home.
@Prolific Programmer: As above, London != UK
@Nickoli: NHS is a state benefit, hence is funded from NI.
http://news.bbc.co.uk/2/hi/uk_news/politics/1934690.stm
In Japan gas has been about four dollars a gallon for quite some time (125 yen per liter at 120 yen to a dollar and 3.78 liters to a gallon).
Suffice it to say, you say a lot more fuel efficient cars on the road here. My car is over ten years old and not a hybrid, but it still gets about 35 miles to the gallon.
Frankly, I don’t think anyone who bought an SUV has any right to complain about the cost of gas. You ever here of supply and demand?
When I got my bigger car recently (from an older compact sedan to a new small SUV), I told myself I couldn’t complain about the higher cost of gas. And I haven’t.
I will continue to pay for gas (I only fill up about every 1.5-2 weeks), but the higher cost will lead me to spend less in other areas.
I live in the DC area. While commuting to DC for work in certain areas isn’t so bad, the Metro isn’t actually “mass transit.” I would love for a better transportation system to happen here, but it doesn’t look like it’s going to happen anytime soon.
Doesn’t everyone remember the $3 a gallon horror stories we were told back in early 2000? It took years before we broke the $3 mark even though the experts claimed we’d be hitting it that summer of ’00, ’01, ’02, etc.
What I’ve always wondered was why no one ever did the story of why those doomsayers were wrong back then. What happened that kept their ongoing forcasts from being right?
I also remember reading in the 1990′s several stories about how oil producing countries never wanted US prices to go over $2 mark. Something to do with the fear of alternative energy being more viable if that happened and they were afraid that a push would be made to find new oil fields. Whatever happened to those fears from the oil producing countries?
Wait, “alternative” energy is oil fields in NON OPEC countries? How uncreative are those executives?
For the past three years, at the same time every year, gas goes up to “record levels” – in summer 2004, it broke the $2.00/gal barrier, in summer 2005 it cracked $3.00/gal, and then in summer of 2006 it stayed around $3.00/gal. Guess what happened after Labor Day on each of those years? With the exception of 2005, where Hurricane Katrina hit hard, gas plunged back down (in 2005, gas returned to around $2.00 per gallon or less around October.)
Who makes $4/gal gasoline? There are many players, all out for their own machinations and desires. All play hand in glove in this game of “how high will the gas prices go?” The easy point of entry is to blame Big Oil or environmentalism. But there are other lesser players that do just as much damage to keep the gas prices high.
Start with the media. If gas prices were still $1.50 or less per gallon, we wouldn’t hear a peep out of them. Since angry consumers make great news and bring in high ratings and circulation, just like “if it bleeds, it leads” news stories, you can bet the editors and producers will tell their reporters to jump on the “batten down the hatches, $4/gal is coming!” bandwagon. Once Labor Day rolls around, gas “miraculously” drops 20 cents/gal per week – but doesn’t tell the public it’s because the summer driving season is over. When we begin to take a gimlet eye at the media and wonder aloud if they don’t have a few markers in shaping the price of oil, you can bet quite a few editors/publishers will drop the $4/gal story like a hot rock.
Next, let’s head to Wall Street. I agree with one of the posters here (Dwayne_Dwibbly) that the pundits on Wall Street seem to have a Wheel of Excuses to determine why Nick’s Gas went from $2.95 one week to $3.15 the next. If there’s panic buying in the energy pits for the purpose of extending profits (and not just for the oil companies, but big trading firms like Goldman Sachs, hedge funds, corporate raiders, robber barons, and others), then what’s been going on in the past three years is racketeering and insider trading – something the SEC, the IRS, and the Feds don’t hesitate to fix decades long jail terms and eight-to-nine figure fines on those who make ill-gained profits.
Our next stop: politicians. These are the people who purport to represent us, and whenever those gas prices go up, have the same catalog of solutions…windfall profits taxes (will never happen: whatever the oil companies will pay will be passed onto the consumer in the form of even higher gas prices), alternate fuels (possible, but some fuels take even more energy to produce; car companies may balk at producing an electric or alternate-fuel car if the profit isn’t there), gas mileage standards (good idea as it saves money, but some people enamored with SUVs may take a lot of convincing to give them up), and public transit (great idea for huge cities, okay idea for smaller cities, not great for small towns, a waste of money for out-of-the-way areas).
Meanwhile, the same media are not asking these politicians, so concerned for their voters, if they maybe have a stock or a thousand in these same oil companies they like to parade in front of Congress, or maybe have a few friends in the hedge funds or the Big Stock Traders who kick back a little bit of the oil-trading profits in exchange for campaign contributions keeping them in office. If that’s the case, every time a politician opens his/her mouth about “record oil profits,” a journalist should shout out, “But sir/madam, in a recent SEC investigation, it was determined that you owned several thousand shares in an oil company and sold them at a profit. Would you care to comment on that?” What will come first – the cries of outrage from voters, a boilerplate “public statement” that only a well-seasoned damage control flack could generate, or absolute stone silence?
Finally, as much as I hate to say it, the people who are also responsible for creeping $4/gal gas is, unfortunately, us. Drivers who keep good maintenance on their cars, make sure they don’t idle, find gasoline bargains (why spend $3.15 a gallon for gas when $2.85 gasoline is right across the street?), buy cars that are fuel efficient (get something 25-30mpg and you’re in business; hybrids even better) and keep the tank topped up to avoid multiple fuel-ups won’t feel the effects of $4/gal gasoline, if at all. Those who fall for the media’s scare stories, Wall Street’s excuses, and the politician’s solutions, without making a single change in their driving habits will not bring gas prices any lower – in fact, we might see $5/gal without any further effort on their part, all because someone thinks there will never be a drop of gasoline or oil ever again.