Fri 9 Mar 2007
If there is one thing I don’t understand is, how much people care about gasoline prices. If a news story came out today that said tomorrow all gasoline prices are going to jump by 10 cents, there would be lines wrapped around the block waiting to fill up for gas. I mean it would be great if people were actually that concerned about their finances, that the extra $1.20 (12 gallon gas tank) it was going to cost them just was unacceptable, but it’s not it’s something else and I don’t get it.
These are the same people will drive 10 miles to the gas station going 75 mph on the free-way in their gas guzzling SUV to save 10 cents a gallon on their gas and while they are there will pick up a $5 cappuccino, a pack of cigs, $10 worth of lottery tickets, and put the whole thing on their credit card which is at 28% interest and will make the minimum payment when the bill comes next month. People make the absolute worst money decisions in the world and essentially throw away thousands of dollars away on useless things, but when it comes to gasoline prices (something relatively minimal in the grand scheme of things) they act like they are the most frugal person that has ever walked the face of the planet.
Take for example this recent article on Yahoo about how gas prices are on the rise again. You know the same thing that happens every spring as we approach the “driving season” and well you know the oil and gas companies never seem to be able to prepare for this cyclical part of the year and there will inevitably be a gas shortage and gas price increases and it’s going to be damn near impossible for people to survive again. People will be spending all their money on gas and so they won’t shop and the economy will go into a tailspin, companies will go out of business, people will lose their jobs, and stocks will crash. Ok I’m being over dramatic but in one way or another this is what the media portrays every time gas is going to jump 10 or 15%. Maybe it’s because this is one issue that really grabs peoples attention (justifiable or not), but in the end gas prices do rise and nothing happens other than people and the media complaining about it.
If gas prices were actually a significant issue and people really cared that much about it you would see some action to help offset this unbearable burden, but people complain and life goes on as usual. Take this exerpt from the yahoo article as a prime example. What is wrong with this picture?
“”It kills me,” said Gloria Nunez, 53, as she filled her Ford Explorer SUV at a San Jose gas station. Nunez, a clerk for a communications company, has started working a couple hours of overtime each week to help soften the blow. “All of a sudden you kind of have to watch your pennies,” she said.”
She’s driving a Ford Explorer SUV
If gas prices really were that unbearable maybe she’d think about driving something that gets more than 16 mpg. I don’t know her situation, but I’d bet its fair to say that a vast majority of SUV owners, don’t need an SUV. I’ve never been to San Jose, from google maps it looks like there are some mountains and maybe Gloria’s communications company is located high atop the mountains to get better reception, but I doubt that is the case. If I had to guess I’d also bet that a majority of Gloria’s travel is done with only her in the car so the extra cargo/passenger room isn’t really an issue, but I’m sure social status is and what she drives is an issue.
Heck just by switching to a Toyota Camry she could save over $1000 a year with gas at $2.51 according to the EPA. Every fillup she would save $10 and could get an extra 142 miles before she had to fill up again. This is with a family sedan I didn’t even compare it to a small car such as a Corolla. Also add in the fact that she probably paid about $8,000 more for her Explorer vs. the Camry if she bought it new. Also add in the fact that the above calcs assume $2.51 gas, Gloria lives in San Jose where the current average gas price is $3.03 so the extra cost of an SUV is magnified even more.
“..started working a couple hours of overtime each week to help soften the blow”
Now because I don’t know which gas price increase officially put Gloria’s expenses over the edge, lets go ahead and say that gas was $2.75 in San Jose a few months ago, this $3.00 stuff is killing her, and God forbid gas jumps up to $3.25 this summer. A 50 cent increase!! This is going to cost her $9 a week, which I understand is not chump change and does eat into your pocket book, especially if you drive an SUV, but it’s not like she’s going to have to work much more than an extra hour a week to recoup her gas prices. In fact if she just switched to a Toyota Camry she would be saving $23.42 a week now. If gas jumped to $4 a gallon a $1.25 increase from the original $2.75 starting point it would cost her $22.53 extra a week which still is more than it’s currently costing her to drive an SUV versus a family sedan. Gas price increases are pretty insignificant when put into perspective to other costs.
Maybe I don’t get it but to me gas prices are very insignificant. If gas is going up 25 cents tomorrow I’m not going to grab all our vehicles and rush them to the gas station to top them off and save a couple bucks (and I’m about as cheap and frugal as they come). People have no control over gas prices so for me I don’t worry about it and I’ve never felt a tightening of my pocket book because of gas prices. Granted I drive a car that gets 30+ mpg and I live relatively close to work now, but I’d take $5 a gallon gasoline hands down over a lot of things when it comes to dollars and cents (credit card debt, smoking, driving an SUV, etc).
I’m all for saving money wherever you can, so if you want to scour online for the lowest gas prices, and fly to the gas station when you got insider information about a 5 cent gas hike tomorrow all the more power to you, but don’t act like it’s the end of the world financially, especially if you drive an SUV and have other bad financial habits that are going to be much more expensive than $3 gasoline.