One of the most frequently complained questions that I hear is, “why are gas prices so high?” I’m completely dumbfounded, shocked, and in pain after I hear it. Here’s why.
First of all, The U.S has some of the cheapest gas in the world. Many other developed countries pay far more than we do per gallon. Still somehow, Americans expect $0.99/gallon gasoline to make it’s return.
But of course, trying to explain to someone that they have it good at $3.50/gallon is not an easy task. Especially when “Mr. President” get’s on the boob tube and complains right along with them. Because of course, he relates with the “struggling middle class.”
What’s even more difficult, is trying to stomach that silly question while staring at their vehicle. It’s usually a 4,000+ pound mammoth that get’s 12 MPG.
Surely you know what I’m referring to here, it’s always the giant elephant in the room during those cheesy CNBC interviews. The reporter, who obviously either can’t find a real story or isn’t allowed, interviews an individual (we’ll call him Joe) who cries and whines about the cost to fill up with gas. Something like “It’s darn well costin’ me $65 per week to fill up these day. Who can afford that!? I’m having to choose between gas and food! Something’s got to be done to remedy these high prices!!!”
At that point, I’m always like “Dude, Joe, you drive an SUV to work every day that seats 7 people and weighs more than a small freight train. And you’re complaining because it gets bad gas mileage?”
Do you see the problem here? If not, I’ll tell you. The problem is that gas prices aren’t high enough.
Why Are Gas Prices So High?
Let’s first talk about why gas prices have gone up so much in the last 10 years.
Ultra cheap oil and energy subsidies caused much of this problem. While oil prices were so low, for so many years, the U.S. consumed, and in massive amounts. Entire cities, perhaps an entire economy, was built on cheap oil. We consumed as if oil reserves were infinite, and pricing was set.
Our cities are extremely spread out, and gasoline waste is UNBELIEVABLY high. People refuse to think about their driving habits and the associated price tag. For example
- Want a snack? Just jump in the car and drive 3 miles each way.
- Need groceries? Just get them! Who needs to plan errands around other errands, to save money and time?
- Want to shop? Go now. It’s only 10 miles. Who cares if you will be on that side of town tomorrow or not.
- Can’t stand driving a little car? Buy an SUV or truck you will absolutely never need. Who cares about the MPG?
- Want to impress others? Buy what’s in style! Gas prices are irrelevant.
- Have 2 kids? Gotta get that new SUV! Need that extra space!
- Found a job? Who cares if it’s a 25 mile commute?
Consumption and demand began rising quickly, and that trend spread across the globe. The world was hungry for oil, and willing to pay. Worldwide demand has continued to rise quickly.
Gasoline pricing is often whack. Hedge funds, futures, and market speculation has caused price increases. Also important to note, is the fact that a few key players control much of the production and pricing of oil and gasoline. Price manipulation is part of the game.
Stepping back a little, we can also see that gasoline is a finite resource. It’s going to run out. That’s inevitable. I don’t know when, and I don’t care, but realize that it won’t last forever. And more worrisome in the now, is the fact that world consumption continues to rise, while global production has its limits. Guess what that mean, increased demand pushes prices higher.
The United States does produce some oil, and that production has actually been increasing. But prices will remain high. We have infrastructure issues in dealing with refining shale oil, and I really don’t see increased domestic supply having much impact on the price at the pump. For now, you’re going to pay the price that is produced by worldwide demands.
Even if we drill and produce more domestic oil, or if Congress found a new way to suppress prices at the pump, it’s a temporary band-aid. Oil is still being depleted, and lower prices just encourage more consumption, which fuels the whole cycle. Cheaper prices and more consumption won’t solve anything in the long term.
Why I Want Gas Prices to go Higher
Shocking, right? I think higher prices can result in positive changes.
If prices continue to rise, people will be forced to start making intentional and rational decisions that limit their gasoline consumption.
The ridiculous gas guzzling automobile market would shrink, while demand for efficient automobiles would boom. I like efficient, and I like more used car options.
People would walk and bike more, resulting in pleasant interactions and better overall health. They would have less stress, less traffic, less road rage.
Cities would become more efficient, and probably less spread out. Cities would be forced to produce roads that are actually bike friendly due to increased demand. (Our city doesn’t even have sidewalks available on some main roads. What a joke.) Public transportation use would increase, resulting in more options and more routes.
They would also have more money available to spend on local goods instead of foreign oil, resulting in more domestic consumption, and hopefully a healthier local economy.
How about higher gasoline taxes to further decrease consumption and further boost tax revenue. Instead of road repairs, what about putting the money in education or healthcare?
It’s important to realize that you aren’t a victim of gasoline prices. You control how much you spend.
Going back to the Joe’s beginning question, “Why are gas prices so high?” The problem isn’t the pricing, the problem is Joe.
It’s pretty simple to understand. Joe drives a vehicle that is far too big, far too expensive, and far too wasteful. In addition, Joe drives like an idiot.
Regarding the latter, I’ve already posted on Hypermiling (and again here), so you may want to refer to those for some simple ways to get better gas mileage.
I’m amazed by driving habits. People are unbelievably bad drivers, primarily with regard to gasoline consumption.
- They drive 80 MPH on the highway, when they could drive 65 and save 20% in gas.
- They floor it from stoplight to stoplight, in a road raged furry. Only to waste gasoline and wear out the brakes.
- They refuse to look ahead and avoid getting stuck in traffic.
- They refuse to acknowledge that accelerating quickly won’t allow you to reach you final destination any sooner, especially when the next light is most obviously red.
- On, and on, and on.
After changing your driving habits, change your vehicle. 5 People or less can easily fit into a car that gets 35 MPG or better on the highway. Get rid of your truck, SUV, van, or whatever you own that is sucking gas.
I have no respect for complaining individuals who drive massive, wasteful vehicles. Why on earth would a couple ever cruise around in an SUV? They are using a 300 horsepower engine to transport 300 pounds of flesh. Oh wait, I forgot about the 5,000 steel box they are lugging around. These people even have the audacity to complain about gas prices while sitting in that steel box! Can you imagine?
Speaking of waste, stop driving around town to entertain yourself and kill time. It’s costing you a fortune. Get a hobby, like reading, and do all your errands in one night.
We own one car, and we fill it up once every couple of weeks. I ride the bus every day for free to school and work. Which reminds me of an amazing story. Our college automatically pays for all students to ride the bus through a small fee charged each semester. So you have to pay it, and all bus fare is FREE. I’m the only student I know who consistently rides. That’s not a joke. That’s how I know gas prices are not high enough.
Please, stop the madness. Next time someone asks you “why are gas prices so high?” tell them that they aren’t high enough!