(mouriran)
With the economy kinda sorta picking up, and consumers in China, India and Brazil buying cars in droves, gas prices are expected to keep going up, and may hit $4 a gallon by early spring, when Americans finish scraping the ice off of their windshields and begin planning road trips. And unlike 2008, when gas last broke the $4 barrier, only to later drop to lower prices, $4 may be a new baseline, followed by $5 gas as early as next year.
CNBC looked at the factors driving prices up:
Sometimes prices jump in late fall if the cold weather starts early, generating competition for crude oil between home-heating oil and gasoline. But that didn’t happen this year, and prices rose anyway — mostly because of this demand from growing markets.
A couple of other factors have also contributed to the nonstop ascent of gas prices since last summer: Rising crude-oil prices, since oil is used to make gasoline, and the weak dollar, since all oil is traded in dollars and when the dollar is weak, foreign currencies buy more dollars — and more oil.
Now, here’s the really bad news: Prices are expected to continue rising straight through the summer driving season.
CNBC lists the usual fuel-saving tips, including keeping tires inflated and avoiding heavy loads. If that doesn’t do it, you could always get a $157,000 electric car.
Gas Prices and Economy: What Happened to the Winter Break for Gas Prices? [CNBC]
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Yes, this blows. I have a huge 87 Silverado that I bought when I was young. It gets 8 mpg and I hardly ever drive it. I still needed a vehicle that could tow a couple ATVs and wanted one that was 4×4 and could carry 4 adults. I wound up with a 2000 Cherokee, which gets twice the mileage of my old truck. That still sucks compared to the 40+ I was pulling with my 05 Corolla and some hypermiling techniques, but that’s the trade off for the rest of the capabilities.
People pay more for diesel and electric cars already. The public is ready alternative sources of energy. It’s going to take rising gas prices for the market to shift to the point where these other vehicles are financially viable. Does it cost more to produce a cutting-edge battery pack than a simple internal combustion engine? You bet.
We as consumers need to stay educated and come to the understanding that the numbers we’ve been fed, such as horsepower, torque and miles per gallon aren’t all that important. We need to worry about other values just as much, such as cost of operation and total cost of ownership. We need to know how to compare the numbers from one vehicle type to another in relevant ways.
Around the time I bought that Corolla I mentioned above, gas was about $2.50 a gallon. I was driving about 30 miles a day. The truck was costing me about $280 to fuel plus $60 to insure. (As it is partially based on weight, VA’s BS personal property tax was up there as well, but I don’t remember what it was. Also the tires I was wearing out on the truck cost twice as much as the car but I’m trying to keep this simple.) So about $340 just to operate the truck, which was paid for. When I switched to the car, I was paying $320 a month to buy it plus $80 to insure it. For the same amount of driving, my fuel use dropped to about $55 a month.
$455 for the car vs $340 for the truck. When you compare these numbers, driving a brand new car cost me an extra $115 a month with just my average driving. The comparable savings went up the more I drove it. (That was 2 fewer nights a month at the bar, as I noted at the time.)
If everybody did math this way, the roads would be a different place.
Exactly! People love to buy new economical cars and laugh at the SUV drivers, but many of those truck/suv drivers are spending a lot less per year to drive. Most people just don’t think about the big picture.
I am going to laught at all the SUV owners out there.
go ahead tell me that you need your suv then i will tell you why did you not buy say a subaru outback wagon our outback sport.
Still tons of storage room and better AWD then most suv’s 4wd.
If we remember back approx. 3 yrs ago, the gas prices started rising out of control and shortly after – everything else bottomed out – if we think it’s been a rollercoaster ride so far – we better hold on tight because I’m afraid we’re in for a submarine ride and who’s gonna bale us out then. The government does have a roll in everything now – DON’T THEY GET IT – OR MAYBE THEY DO!
$5 gas, probably not in the next year or two. The economy (demand) will crash at $4 though greed/speculation might push it higher towards $5. The higher amount will just cause a harder and faster economic crash. So many consumers make the same or less money compared to a few years ago and other rising costs have consumed any buffer to tolerate $4.
Stories of $4 gas make me not regret purchasing a Vespa. I’m already paying $3.50/gal but I get 60+ MPG! Of course I can ride it year-round out here in CA.
I’ve said it before…the last time gas prices rose, not one single person drove 50-55 on the highway. Everyone just whizzed by me, disposable coffee cup in hand, yakking on the cell phone. What would happen if people decreased the demand by 10-15% with this completely passive measure? I defy everyone that reads this to take these steps: keep your tires inflated, drive 50-55 on the highway and drive moderately on surface roads, e.g. coast to red lights. But alas, no one will do it, because we’re ‘Mericuns. Prove me wrong.
The Mazda 2 is looking better and better everyday. Sure doesn’t hurt that it’s cute and comes with a ‘stick, either.
Matters little to me. Currently about $3.30 right now. Say it goes up 70 cents, I buy 10 gallons per week. $7 extra per week to drive around my 30mpg car.
Buy a couple less expressos? People can surely cut a couple of 12 packs of soda out of their lifestyle as well.
http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405
Funny, I don’t see anything about commodities speculation there.
If it were just demand in India and China driving prices, the increase should be steadier than it has been. There should be the seasonal sawtooth pattern, but not this multiannual periodic increase.
If CNBC were a newspaper, you could at least wipe your ass with it.
Once again, we can thank Goldman Sachs – this time it’s their Commodities Index futures. Matt Taibbi, summarizes this beautifully in his latest book, Griftopia.
While Consumerist (and 90% of its commeters) have spent the last two years mocking those who were predicting hyperinflation, some of us were preparing for this, mentally at least. This is inflation, period. ALL commodities are rapidly surging, not just oil. And PLEASE don’t tell me about the CPI. The CPI is a joke and nobody who knows anything at all about economics takes it seriously.
let me start dusting off my motocycle
What you holier-than-thou MPG elitists forget is that some people buy SUVs because we NEED them.
I bought my 4×4 Suburban because I live in a northern, mountainous area that gets lots of snow. I also pull several different trailers with it. In the summer, I pull a travel trailer and load the Sub with the wife, two kids, and a couple other friends and go out to the Pacific Ocean beach, where the 4×4 comes in real handy in the sand. In the winter, I drive up forest service roads with a foot of unplowed snow to cut down a Christmas tree the old-fashioned way.
Let’s see your wagon do that.
I grew up in Alaska. The people who lived in the hills on the unpaved, unplowed roads that were snow and ice half the year and mud half of the remainder usually owned trucks, or full-sized SUVs. But they daily drove Subarus.
And if you can’t cram all that crap in a GL, you aren’t trying.
Your Suburban is only a fair-to-middling choice for your purposes.
fake outrage is fake. Most of the people who buy SUVs never leave pavement; I’m not sure what to do about it (don’t like being in front of an idjit in a lifted 4×4), aside from requiring stricter licensing, so at least they’ve got vehicle specific training
No one ‘Needs’ anything beyond food/water/shelter/basic transportation
Do you ‘Need’ to pull a travel trailer? as in you will DIE without it?…probably not
Do you ‘Need’ multiple trailers all year round? probably not.
Do you ‘Need’ to take a few friends when they probably have their own cars to take? Probably not.
Before you go on your next fake outrage, remember this: YOU are part of the reason why gas prices are creeping higher. If SUV-buyers took a step back and REALLY thought about what they ‘Need’ versus what they ‘want’, they would probably buy something less thirsty that can fulfill 80% of their needs.
Also, for the road trips that only happen once or twice a year, you do not ‘need’ an SUV, you ‘need’ a basic car and you can ‘rent’ an SUV for the trips.
Don’t complain about the high price of gas, when you are, indirectly, part of the problem.
Here is Similar Story
With the economy kinda sorta picking up, and consumers in China, India and Brazil buying cars in droves, gas prices are expected to keep going up, and may hit $4 a gallon by early spring, when Americans finish scraping the ice off of their windshields and begin planning road trips. And unlike 2008, when gas last broke the $4 barrier, only to later drop to lower prices, $4 may be a new baseline, followed by $5 gas as early as next year
Many consequences will come out of this. Car manufacturers will be under even more pressure to develop vehicles that consume the fewest amount gas, the price of food and other goods will also increase, many businesses that rely on transportation as part of their daily operations will have to shed the increase of fuel on to their customers (I.E. delivery companies, public transportation, etc) It will also hurt many retail and tourism businesses as fewer people will be going anywhere unless its absolutely essential, like buying groceries, going to work and so on. This will only lead to a down ward spiral for the economy.
Here in Ireland, unleaded is €1.45/liter. That works out at $5.48/gallon….
Tax makes up the majority of the price.
Other European countries are more expensive.
The slow painful screwing of Americans continues. Not just foreigners doing it. Your own fellow citizens are greasing up too again.
Record high supply, much lower than expected demand. Even OPEC says it’s wall street speculators driving the prices up.
“”The only thing that I’m concerned about is the pressure exerted by speculators, analysts and some investors in the futures market on prices to push them up or down away from market fundamentals,” he said.” – Saudi Oil Minister Ali al-Naimi
http://news.xinhuanet.com/english2010/business/2011-01/24/c_13705091.htm
Already ready already. Wife and I moved close to work and carpool in our Toyota Prius. If gas doesn’t hit $5, then I did a whole lot of preparation for nothing. Well, nothing aside from the convenience of have a ten-minute commute.
SO glad I got a Prius, even though I have to have car pymts again….
I don’t mind paying higher gas prices, anyway, because I want to see less
people driving giant SUVs
Looks like that “double-dip” recession that some people have been talking about is gonna be a reality after all. Not that the oil companies will care; they’ll be back to making “record profits” once again.
I did… i got a mazda2 and I get 30/40mpg city/hwy… even more if i drive slower