We Americans have such a short term memory when it comes to the price of gasoline. It seems that just as soon as gas prices drop people rush to car dealerships everywhere to buy trucks and SUVs.
There are several factors that have led to the drop in oil prices, but I wouldn’t be surprised if this “half off” sale evolved into $5 per gallon fuel before your 60 month financing is up!
A few things to consider:
Fuel Economy: Vehicles just keep on getting better and better mileage. Many small cars are rated at upwards of 40 miles per gallon (even higher for hybrids and electric cars) and even some full-sized trucks and SUVs are achieving 20 MPG or more.
Fracking: More formally known as Hydraulic Fracturing, fracking is a method by which chemicals are mixed with water then pumped deep into the earth to break free natural gas that is trapped in rocks. Fracking has expanded in the United States and Canada allowing North America to produce more fossil fuels.
The Middle East: Normally in response to dropping oil prices Saudi Arabia would reduce production to stabilize prices. For the time being they have decided to maintain production which has allowed prices to continue to fall.
Too many eggs in the Royal basket.
Betting on the Middle East is not going to end well for fuel prices. Fracking is only economically feasible when oil prices are high. If prices remain low eventually it won’t make business sense to frack. As soon as fracking stops making financial sense the Middle East will most certainly reign in production to drive prices back up.
Stick it to the man:
Just say no! If every time fuel prices drop we flood the streets with lower MPG trucks and SUVs, we will increase our demand for fuel and drive the prices back up.
Carpool when possible. If every commuter split their ride to work there would consume less gas and enjoy less congested highways.
Take public transit. AAA recently released a report stating that between gas, insurance, payments and maintenance, the typical commuter spends $9000 on their vehicle. Taking the bus or train dramatically reduces the cost of getting to work. It also reduces stress levels from not having to focus on traffic.
How you drive matters. They say that up to one-third of your gas mileage is lost during acceleration. Getting up to speed slower reduces wear-and-tear on your vehicle, increasing its life and your fuel economy.
Fracking is bad. It’s already been banned in New York State. Fewer sources mean higher prices.
Check out www.fueleconomy.govfor the fuel economy rating of every vehicle sold in the United States.
Learn more at www.zerowasteguy.com.
…and/or get a bike and keep fit for free! You might be the first one in your town but they'll soon get used to it…
Thanks for your comments, Richard. I am an active cyclist, but motorists are not yet warm and fuzzy in my area.