Sunday, March 20, 2011

Gas Price Perspective

The national average for a gallon of gas is up to $3.53/gallon, and we're still two months away from the summer driving season, when prices will no doubt peak at over $4/gallon. Several recent articles have said that Americans aren't quite as panicky over the cost as we were a few years ago because, they claim, we learned our lesson about energy conservation after Hurricane Katrina, buying more fuel-efficient vehicles and driving less.

That may be true in some sectors of the economy that have gotten greener, but on the whole, Americans are just not that good about financial lessons -- even as we recover from the recession -- so the $4 mark may still not be enough to force us to change consuming habits. And if you think that the speculators have changed their greedy ways, you're wrong. Witness the price spikes after the violence began in Libya, and imagine what they'll do if the protests spread to other oil-rich Arab nations (prepare to re-mortgage your house if the Saudis begin mass demonstrations).

Then again, perspective is always a good thing. You're still not paying as much for a gallon of unleaded as you are for a gallon of Coke ($3.84), orange juice ($7.68), or Red Bull ($28.16). You're cleaning yourself with Purell and shampoo that cost over $25/gallon. Extrapolate the cost of a grande latte at Starbucks and you're paying around $64/gallon. And it's a good thing your car doesn't run on nail polish remover, which is priced at a very reasonable $1,024/gallon.

See this chart for more [thanks to Joel Makower for the link].