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Much Ado About Gas Prices

Hemos posted more than 7 years ago | from the why-do-we-care dept.

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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Eh hem, size matters. (5, Funny)

suso (153703) | more than 7 years ago | (#16129287)

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.

Re:Eh hem, size matters. (1)

gfxguy (98788) | more than 7 years ago | (#16129296)

Good point.

Another problem is that it's a big deal because the media makes it a big deal.

Re:Eh hem, size matters. (4, Insightful)

suso (153703) | more than 7 years ago | (#16129343)

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:Eh hem, size matters. (2, Informative)

emamousette (871456) | more than 7 years ago | (#16129396)

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.

Re:Eh hem, size matters. (3, Informative)

Pope (17780) | more than 7 years ago | (#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:Eh hem, size matters. (4, Informative)

GundamFan (848341) | more than 7 years ago | (#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.

Re:Eh hem, size matters. (1)

gfxguy (98788) | more than 7 years ago | (#16129533)

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 than the 150HP Jetta 2.5. Moreover, while the diesels require maintainance, like any other vehicles, the engine is simpler which saves on maintainance and tune ups.

No, I'm not a salesman, nor do I own one. I was prepared to buy one a couple of years ago, but VW has had some quality control issues. Apparantly, that didn't apply to the TDI, but I was wary and ended up buying something else.

Re:Eh hem, size matters. (0, Troll)

BobDigiDigi (957534) | more than 7 years ago | (#16129551)

Here in Europe diesel cars are very common. They cost more, aren't as powerful as fuel engines, are in fact thermodynamically less efficient, they don't develope power over a certain rpm regime like good ol' gasoline cars do so nicely, they combust on high(er) pressure resulting in more vibrations and noise, but they consume less, so on the long run they're cheaper. I don't like them.

Re:Eh hem, size matters. (4, Funny)

Benwick (203287) | more than 7 years ago | (#16129401)

Yes, and most people use about 14 gallons of shampoo for every three hundred miles they walk.

Re:Eh hem, size matters. (1)

stevey (64018) | more than 7 years ago | (#16129540)

Speak for yourself - I've not used shampoo in years!

Instead I've burnt my way through hundreds of razors and blades ..

What about considerations of branding? (1)

PrescriptionWarning (932687) | more than 7 years ago | (#16129492)

normally when doing shopping for things (read: not gasoline), even though we tend to want the cheaper prices we also usually feel a bit more geared towards a particular brand and will lean towards it over the non-favored brand so long as the price difference isn't too high.

however, when it comes to guzzoline, most people I think simply go for the cheapest price and/or convenience of being close to where they happen to be when the Empty mark is reached. It is my belief that for the most part brand has almost nothing to do with gas, with only few exceptions.

Re:Eh hem, size matters. (3, Insightful)

corran567 (857209) | more than 7 years ago | (#16129496)

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 places), just 5 years ago gas was $1.50. So now, It is $1.50 more a gallon, multiply that by 20 gallons and it is $30 more a fillup. Multiply that by 52 weeks a year and it is $1560. Now that is something to complain about. Oh, and I know I am from the US, but I have a fuel economy car (33 mpg) and I have a 30 minute commute. Oh, and for those of you that say move closer to your work, that is not possible because I work someplace that the cost of living is far out of my price range, which may be why most of the people at my company have 20+ minute commute.

To really put things in perspective.. (4, Interesting)

avij (105924) | more than 7 years ago | (#16129293)

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 [polttoaine.net] (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..

Re:To really put things in perspective.. (4, Insightful)

grasshoppa (657393) | more than 7 years ago | (#16129302)

Wish we *had* public transport to use.

Re:To really put things in perspective.. (5, Insightful)

GigsVT (208848) | more than 7 years ago | (#16129337)

Would you pay $6/gallon for gas to support the taxes required for all those socialist services?

Re:To really put things in perspective.. (1, Informative)

bhima (46039) | more than 7 years ago | (#16129355)

I do and I do so happily.

Re:To really put things in perspective.. (-1, Flamebait)

Anonymous Coward | more than 7 years ago | (#16129460)

Good thing you are there...

Re:To really put things in perspective.. (1)

insideyourhalo (591645) | more than 7 years ago | (#16129405)

From Wikipedia - For decades now, Finland has had a highly industrialised, largely free-market economy with a per capita output equal to that of other western economies such as for example Sweden, UK, France and Germany. Three cheers for the free market, It appears that the invisable fist is driving up the price.

Re:To really put things in perspective.. (5, Insightful)

Don853 (978535) | more than 7 years ago | (#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.

Re:To really put things in perspective.. (1)

91degrees (207121) | more than 7 years ago | (#16129454)

I spent 4 years living in London, not paying high gas prices because the public transport was so good.

Other taxes are much higher, but on the whole, people don't actually mind paying more for worthwhile public services. There are very few who would agree to the abolition of the NHS for the equivalent reduction in income tax.

True (0)

Anonymous Coward | more than 7 years ago | (#16129536)

And somebody has to pay to keep you safe with the CCTV cameras.

Re:To really put things in perspective.. (1)

AusIV (950840) | more than 7 years ago | (#16129488)

Not quite. I suspect by removing some middle men, public transportation saves a relatively significant percent per gallon.

Re:To really put things in perspective.. (0)

Anonymous Coward | more than 7 years ago | (#16129491)

Absolutely. In fact, I'd pay $10/gallon just to watch the Ford Exhibition drivers whine.

Re:To really put things in perspective.. (1)

kfg (145172) | more than 7 years ago | (#16129529)

Absolutely. In fact, I'd pay $10/gallon just to watch the Ford Exhibition drivers whine.

I don't buy gas, but I couldn't afford those sort of gas prices for my bicycle. If I'm going to be "punished" for not even driving I might just as well buy a car.

KFG

Re:To really put things in perspective.. (3, Insightful)

sixintl (956172) | more than 7 years ago | (#16129369)

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.

Re:To really put things in perspective.. (1)

Alkonaut (604183) | more than 7 years ago | (#16129462)

Yes, the huge shopping malls located far away, and the lack of public transport is just the result of having really cheap gas for a couple of decades.

Once the american society adapts to the fact that driving 1 mile might cost 1 dollar, then the malls will be smaller and closer, and the cars will be more efficient.

By the way, if european cars get better mileage, why not buy a european car??

Re:To really put things in perspective.. (0, Troll)

cs02rm0 (654673) | more than 7 years ago | (#16129507)

Yikes, another American who hasn't been overseas.

There is no store within 40 minutes of me (in the UK) and I drive over an hour each way to work - it would take me over three hours each way and cost me somewhere near 10-12 times as much on a train. If I tried getting a bus there and back I wouldn't actually be able to do it in a day.

Re:To really put things in perspective.. (0)

Anonymous Coward | more than 7 years ago | (#16129381)

And you are complaining that gas prices are high?


High tax dampens out the volatility in gas pricing a lot. In Europe it goes between expensive, and slightly less expensive. In the US it varies between dirt cheap, and fairly cheap. Fixed, high prices are easier to budget for than wildly variable ones, so it is kind of rational.

Re:To really put things in perspective.. (4, Funny)

LaughingCoder (914424) | more than 7 years ago | (#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.

Re:To really put things in perspective.. (1)

cs02rm0 (654673) | more than 7 years ago | (#16129465)

Good job people tend towards urbanisation then isn't it.

Re:To really put things in perspective.. (0)

Anonymous Coward | more than 7 years ago | (#16129451)

Us americans complain because there is no public transport and everything is far away. I blame whomever designed the cities here.

Re:To really put things in perspective.. (1)

q-the-impaler (708563) | more than 7 years ago | (#16129500)

People CHOOSE to live outside the cities in the suburbs so that they can have more land, larger houses, smaller # of kids in classrooms, etc. So the city planners aren't to blame. Blame the housing consumers.

And I am one of those consumers, and no I do not complain.

Re:To really put things in perspective.. (1)

kfg (145172) | more than 7 years ago | (#16129466)

You do not pay more for gas. You pay more in taxes.

Re:To really put things in perspective.. (1)

HippyInASuit (976964) | more than 7 years ago | (#16129493)

FYI, we can't get 95 or 98 octane gas from the pumps here in the US. Us folks on the East coast are lucky enough to get 93 octane, but out West they can only get 91 octane.

Plus our gas is 10% ethanol, which does not output as much energy as gasoline.

You are paying a premium, but you're getting the good stuff!

Re:To really put things in perspective.. (2, Interesting)

jrumney (197329) | more than 7 years ago | (#16129554)

It's just different ways of measuring octane. US 91 octane is the same as 95 octane in Europe. Europe uses the Research Octane Number (RON), US uses an average of RON and Motor Octane Number ie: (RON + MON) / 2

Re:To really put things in perspective.. (1)

morgan_greywolf (835522) | more than 7 years ago | (#16129524)

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 could be a LOT worse. And it's going to get a lot worse -- oil supplies will continue to deplete. Sell that huge honkin' SUV now and get yourself a small hybrid. Now. Seriously.

Re:To really put things in perspective.. (1)

Easy2RememberNick (179395) | more than 7 years ago | (#16129553)

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 (4, Insightful)

eldavojohn (898314) | more than 7 years ago | (#16129300)

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 [washingtonpost.com] about what the hell happened with the congressional hearing [cnn.com] that was supposed to investigate Exxon Mobile? And we're subsidizing gasoline companies [ucsusa.org] through preferential tax codes? Am I the only person wondering what is going on here?

Re:Exxon Mobile (2, Funny)

Anonymous Coward | more than 7 years ago | (#16129322)

What's the Exxon Mobile? Is that like the Popemobile but for the Exxon-Mobil executives?

Re:Exxon Mobile (5, Informative)

Anonymous Coward | more than 7 years ago | (#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.)

Re:Exxon Mobile (1)

jedrek (79264) | more than 7 years ago | (#16129420)

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:Exxon Mobile (1, Insightful)

Benwick (203287) | more than 7 years ago | (#16129423)

Also consider that the gas prices are magically dropping for no apparent reason seven weeks before election day.

Re:Exxon Mobile (2, Informative)

gorbachev (512743) | more than 7 years ago | (#16129448)

"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.

Re:Exxon Mobile (0)

Anonymous Coward | more than 7 years ago | (#16129463)

The oil companies recorded record revenue, not profits. If you don't know the difference, I pitty you and your government education.

Pump Fraud (2, Interesting)

Savage-Rabbit (308260) | more than 7 years ago | (#16129480)

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 them. Price fixing is not the only scam. Apparently some gasstation owners advertise lower prices on gasoline than average and then short change bargain hunters at the pump. The customer thinks he is paying a bargain price for a gallon of gas but in reality the pump only spews out a portion of a gallon and with fuel level indicators in cars being as inaccurate as they are most people don't notice they are getting ripped off. The only thing these guys have to watch out for while they rake in the money is the odd customer who has come to fill their Jerrycans and 'Dept. of weights and measures' inspectors.

Re:Exxon Mobile (1)

kalel666 (587116) | more than 7 years ago | (#16129485)

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?


http://www.taxfoundation.org/news/show/1139.html [taxfoundation.org]

Maybe Congress got smart and realized they'd be killing the golden goose? Doubtful, I know. For those too lazy to hit the link, oil profits from 1977 to 2004: $643 billion. Total tax revenue from oil: $1.343 trillion. Yes, trillion.

So where does the government get off criticizing oil companies for excessive profit, other than as an excuse to bloviate publicly, and show they're concerned with the "common" man? Maybe they'll all publicly thank the oil companies for bringing the price down now. I read price could conceivably go as low as $1.25 a gallon again. I'm sure Congress will extol the virtues of the oil companies then.

Spare me (from Congress).

Re:Exxon Mobile (2, Insightful)

UbuntuDupe (970646) | more than 7 years ago | (#16129505)

And we're subsidizing gasoline companies [ucsusa.org] 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 products) is 40-45 cents a gallon, LARGER than typical sales taxes.

2) Net government expenditures: it refers to government projects not funded by user feets, mostly with transportation. But the transportation is a subsidy to anyone who transports themselves that way, whether or not they use "oil", so it can't really count. It claims energy research is subsidized, and this may be true, but research is mainly to make better use of any kind of energy so it's unclear how oil particularly benefits. It lists the military interventions, which are ridiculous, as every other country somehow manages to buy oil without those interventions. Just because the government claims they "need" a military to get that oil, doesn't mean it's, well, true. Ditto the SPI. (Not necessary in a world with energy futures contracts.)

3) Environmental costs: these can't be reliable because they count deaths related to consuming oil, but don't subtract the lives saved. Also, drivers already spend significant amounts making vehicles pollution compliant. To the extent there are externalities, I accept that victims should be compensated, but because of the small amount a *single* car produces, it wouldn't come out to much per gallon.

What's funny is that they also want me to accept that huge cash grants to renewables "don't count".

Re:Exxon Mobile (4, Insightful)

toetagger1 (795806) | more than 7 years ago | (#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.

UK has far higher fuel prices! (0, Redundant)

Zebadias (861722) | more than 7 years ago | (#16129304)

Come over here to sunny Britan and experence some real 'gas' prices!

Re:UK has far higher fuel prices! (1)

DaveWick79 (939388) | more than 7 years ago | (#16129433)

Perhaps Europe has such high gas prices because the people have been desensitized to those much higher prices. And I know that EU prices have jumped as well, but not as much percentage-wise as gas prices in the U.S. I don't know what kind of profits the oil companies make there or how much of that $5-6/gallon goes to taxes, but here in the States, oil companies are making tens of BILLIONS of dollars at the expense of Joe Consumer. When historically, prices for gas have been less than $1.50/gallon and the inflation factor has not been so large as to warrant doubling the price, you know that someone is gouging somebody somewhere.

Re:UK has far higher fuel prices! (1)

91degrees (207121) | more than 7 years ago | (#16129483)

But you can get a car that does 50mpg.

Re:UK has far higher fuel prices! (1)

cs02rm0 (654673) | more than 7 years ago | (#16129516)

Yeah, if you can afford it and don't mind being limited to a maximum 75mph - if you can find a hill steep enough to go that fast. 30mpg is probably about average for a reasonably affordable car.

High Inelasticity of Demand (2, Informative)

michaelepley (239861) | more than 7 years ago | (#16129307)

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.

Re:High Inelasticity of Demand (1)

TopShelf (92521) | more than 7 years ago | (#16129418)

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.

Re:English (1)

maxume (22995) | more than 7 years ago | (#16129479)

Translation:

People gotta get to work. They aren't going to buy a smaller car or move closer unless they think prices are going to stay high.

Hogwash (3, Interesting)

gr8_phk (621180) | more than 7 years ago | (#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!

Article not about "Gas" savings (1, Funny)

Dareth (47614) | more than 7 years ago | (#16129397)

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!

Re:Hogwash (1)

lbrandy (923907) | more than 7 years ago | (#16129410)

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:Hogwash (2, Funny)

Anonymous Coward | more than 7 years ago | (#16129447)

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 (4, Insightful)

gEvil (beta) (945888) | more than 7 years ago | (#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.

Re:Hogwash (1)

Yogs (592322) | more than 7 years ago | (#16129499)

Like suffering through the crowds, the overal filthiness, and the inhumanly slow checkout lines at Walmart. No thanks. Target is a reasonable compromise in my experience.

It's more then just your car. (3, Insightful)

forgotten_my_nick (802929) | more than 7 years ago | (#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.

Re:It's more then just your car. (1)

fosterNutrition (953798) | more than 7 years ago | (#16129375)

While that is true, shopping for the cheapest gas doesn't help that. I guess there are really two separate issues here: People worrying about the cost of gas itself, and people trying to find the cheapest gas.

Worrying about the cost of gas is probably valid, because as you point out, it is a useful metric of consumer-goods prices across the board. However, as others have pointed out and I will reiterate, other places have *far* higher gas prices (they just look smaller because they're measured in litres).

However, hunting around for the gas station that is $0.03 cheaper is a pointless activity. I would be inclined to agree with those who say it only happens because the prices are displayed in huge letters. Interesting social experiment: try switching all prices over to per litre, and even though the amounts per value are the same, I bet people would freak out a lot less over the large signs.

Re:It's more then just your car. (1)

chrismcdirty (677039) | more than 7 years ago | (#16129443)

But Americans don't understand what a liter is (unless it's in relation to our soda bottles). We'll have to mark it by quarts and pints. ...Wait a minute. Americans don't understand quarts and pints, either.

It's not just gas-at-the-pump prices (5, Informative)

autophile (640621) | more than 7 years ago | (#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).

--Rob

Re:It's not just gas-at-the-pump prices (1)

imsabbel (611519) | more than 7 years ago | (#16129389)

Sorry, you misspelled "oil prices".
Those two are entirely different matters at times.

Gee here's an idea (2, Insightful)

Anonymous Coward | more than 7 years ago | (#16129324)

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?

To be fair... (1)

sheldon (2322) | more than 7 years ago | (#16129333)

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? (4, Insightful)

l4m3z0r (799504) | more than 7 years ago | (#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.

gas prices as a political weapon (4, Insightful)

Anonymous Coward | more than 7 years ago | (#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.

mod parent up (2, Insightful)

kin_korn_karn (466864) | more than 7 years ago | (#16129408)

I can't believe people aren't figuring this out.

It's election season, dumbasses, they're lowering prices to help out their buddies in Washington.

Re:mod parent up (5, Insightful)

LaughingCoder (914424) | more than 7 years ago | (#16129472)

It's election season, dumbasses, they're lowering prices to help out their buddies in Washington.

Nice theory, but what happened in 2004? Remember all those rumors that Bush had a secret arrangement with the Saudis and they were going to lower gas prices around the election to make Bush look good. Well, it never happened. http://www.eia.doe.gov/oil_gas/petroleum/data_publ ications/wrgp/mogas_home_page.html [doe.gov] In fact, gas prices peaked in November of 2004, having risen over 20% from March to November of that year.

Please Don't Confuse the Conspiracy Theorists (1)

geoffrobinson (109879) | more than 7 years ago | (#16129510)

with facts.

Re:gas prices as a political weapon (0)

Anonymous Coward | more than 7 years ago | (#16129486)

Maybe the reason gas prices were as high as they were this summer was because the Democrats manipulated things that way. I mean, they certainly have enough motive. Their key issues are increased corporate regulation, increased environmental regulation, and opposition to the Iraq war. And since they're not the ones in power, anything bad that happens automatically gets blamed on their opposition.

If I were a Democrat, you bet I'd be doing everything I could to get gas prices to go up.

Wal-Mart is king! (1)

jonnythan (79727) | more than 7 years ago | (#16129344)

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 super-significant, but it does matter, so I do the drive.

Re:Wal-Mart is king! (0)

Anonymous Coward | more than 7 years ago | (#16129490)

Except that by supporting Walmart, you're also supporting Walmart's policy of not providing good benefits to their employees. These employees, in turn, goto the ER when sick. Guess who gets to foot the medical bill? Your tax dollars. Don't be fooled into thinking that you're saving money.

TFA is a bit innaccurate (1)

tpjunkie (911544) | more than 7 years ago | (#16129349)

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 exactly how long and how much gas it will take to get there. Unless my car runs out of gas in my driveway, it's just not worth it for me to go to the closer station with its premium price (for convenience, I suppose).

I'll tell ya... (3, Insightful)

s31523 (926314) | more than 7 years ago | (#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.

Re:I'll tell ya... (1)

mabinogi (74033) | more than 7 years ago | (#16129430)

> Other countries have dealt with high energy prices by promoting mass transit, build more efficient cars, etc.

No, we just complain but pay the price anyway. At least that's how it is in Australia

It's That Tenths of a Cent Thing (3, Interesting)

moehoward (668736) | more than 7 years ago | (#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.

OmniNerd, how appropo (1, Informative)

Anonymous Coward | more than 7 years ago | (#16129379)

Please, someone actually went thru all this trouble, and their conclusion is that gas prices are in your face and the larger price signs makes the avg person _think_ it's more expensive. I mean come on, there are some obvious differences in _how_ one purchases gas vs other items. The most obvious is quantity, you will typically purchase 8-20 gallons of gas per fillup, so even small differences can add up. If you were purchasing 50 apples, you'd be much more price sensitive than if you were buying 2. Then you factor in that while product A may be much cheaper at store B, you typically will want to make a single trip and so the savings is then averaged in with your other purchases. When you go get gas, you are mostly just getting gas, so there aren't other price factors. Then one of the most obvious issues is simply that gas is significantly more expensive now than it was a year or two ago, it's that sudden increase and high volatility that makes it more obvious. And lastly is the issue of options, it is the rare grocery item that doesn't have myriad substitutes or that can't be lived without if need be, however, with gas, you are pretty much stuck. You have to either spend a lot of money (purchase more fuel eff. vehicle, hybrid, etc) or make major lifestyle changes (use public transport, ride a bike) or both to work around purchasing gasoline. Typically the variances in gas prices is not that great within a given area, so it basically is what it is.

If you want to spend less on gas (1)

Silver Sloth (770927) | more than 7 years ago | (#16129380)

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.

It's the one futures market most people encounter. (4, Insightful)

Churla (936633) | more than 7 years ago | (#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.

Re:It's the one futures market most people encount (1)

Glass Lizard (997672) | more than 7 years ago | (#16129477)

This is true. One thing I notice when I visit my parents is that the price of gas is mentioned every day. Whenever one of them passes the gas stations on their way home, they report the price to everyone else.

My problem with gas prices is. (1)

Anonymous Coward | more than 7 years ago | (#16129391)

The high price is based on fear mongering by oil speculators over unrealized future events. The price isn't based on fact, it's based on fear. The fluctuating oil prices have made many rich, buy low today, raise the price out of fear of some tragic future event then sell. Billions and billions have been realized by the conglomerate's over fear mongering regarding Iran alone. The price should never have gone over $50.00 a barrel the last six years, because none of the fear driving the price up was real.

Prices coming down! (2, Insightful)

RingDev (879105) | more than 7 years ago | (#16129398)

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.

-Rick

Re:Prices coming down! (0)

Anonymous Coward | more than 7 years ago | (#16129457)

Gee, I said the same thing several posts ago and got modded -1 Flamebait...

but.... (3, Insightful)

TheDrewbert (914334) | more than 7 years ago | (#16129417)

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 pittsburghgasprices.com (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 vehicle every month and 1/2. Gas prices stopped bothering me once I got these habits down.

Verbose Article That Misses the Point (2, Interesting)

organgtool (966989) | more than 7 years ago | (#16129429)

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 manufacturing


All of the items I listed are driving up the price of oil and the only situation that seems to be improving a little is that some Americans are buying vehicles that get better gas mileage.

Re:Verbose Article That Misses the Point (1)

Nexus7 (2919) | more than 7 years ago | (#16129489)

You make very good points.

Additionally:
  - The price of milk isn't a national security issue because we produce all the milk we consume. Other nations, such as Iran, do not try to develop nuclear capability because they massive supplies of wheat or corn.
  - Similar to how the Dow Transports say something about the Dow Industrials, the price of oil (and consequently, gas) leads the price of consumer goods. Manipulation (if it is happenning) of gas prices should be a more serious offence that that of lipstick.

Here's the reason for the penny-pinching (2, Interesting)

Se7enLC (714730) | more than 7 years ago | (#16129432)

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 (4, Interesting)

purplelocust (944662) | more than 7 years ago | (#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

Junk Science/voodoo economics (1)

zogger (617870) | more than 7 years ago | (#16129484)

He left out health issues with car exhaust and the staggering impact that has on the economy (urban air is now colorful chunky style, there IS a health cost there), current and future impacts on the planet with a possible global warming tie-in (note-I am not maintaining that is the only reason, but it is certainly one of them) and he also left out the humongous war and military costs to keep the US in the mid east for generations now. I don't know how much more expensive gasoline would be in the figures then, but leaving that out (Trillions of dollars? Who knows?) makes all the charts and analysis in the article bogus. You can't analyse costs unless you add in *all the costs*.

Obvious: 1) commodity, 2) good information (2, Interesting)

dpbsmith (263124) | more than 7 years ago | (#16129494)

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).

MPG? (1)

BenjyD (316700) | more than 7 years ago | (#16129509)

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.

Cheap energy for private cars is progressive (1)

cryfreedomlove (929828) | more than 7 years ago | (#16129511)

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's an example: gardeners. My gardener is a recent immigrant who can just barely afford fuel and a used pick up truck to run his business. Do you want to force him onto a bus? How will he move is gardening gear?

you mean gas, aye? (1)

cinnander (964876) | more than 7 years ago | (#16129519)

There I was thinking this was about the stuff I run my central heating and hob with, until I got to the part about 'trucking prices'.
Also explains my wondering why I'd not seen any of these news articles about it :)

Meh (1)

Iamthefallen (523816) | more than 7 years ago | (#16129521)

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.

Slightly OT (but no more than 95% of the posts) (1)

Mostly a lurker (634878) | more than 7 years ago | (#16129537)

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 [iags.org] and Crude Awakening [washingtonmonthly.com] .

If the Saudi claims are debunked sufficiently to affect the general consensus, there will be a panic that will send prices through the roof. Let us hope the worst does not happen.

Kind of a stupid question (2, Insightful)

teflaime (738532) | more than 7 years ago | (#16129552)

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" cars (and have luxury prices). The prius is the end all be all of environmental conservatism now. But we have the car fixed in our collective psyche as a must have of american culture, and necessity of any life (and in cities with rotten public transport systems, it is). That necessity status that cars have is what makes gas prices so ubiquitous in our world. Higher gas prices are big oil attacking our freedoms, limiting our range and mobility, and status. Lower gas prices widen these things.
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