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What If - Gasoline is $5 a gallon in 2010?
electrictroy
Member Posts: 564
Could people afford it?
Assuming typical 20,000 per year commute:
88 mpg lupo tdi = $1100 a year
50 mpg prius/civic hybrid = $2000 a year
40 mpg civic or echo = $2500 a year
37 mpg accord hybrid = $2700 a year
31 mpg escape hybrid = $3200 a year
20 mpg "generic" suv = $5000 a year
Wow. I'd bet we'd see a lot of "under 30mpg" SUVs and cars get traded in. The difference between a 20mpg suv & a prius, the fuel savings alone would pay for the car in just 7 years!
troy
Assuming typical 20,000 per year commute:
88 mpg lupo tdi = $1100 a year
50 mpg prius/civic hybrid = $2000 a year
40 mpg civic or echo = $2500 a year
37 mpg accord hybrid = $2700 a year
31 mpg escape hybrid = $3200 a year
20 mpg "generic" suv = $5000 a year
Wow. I'd bet we'd see a lot of "under 30mpg" SUVs and cars get traded in. The difference between a 20mpg suv & a prius, the fuel savings alone would pay for the car in just 7 years!
troy
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Comments
If I drove 20k miles per year I would already have a VW TDI or Honda Insight. Probably the TDI to give me the added option of biodiesel and established longevity.
For me it is not a case of affording it, I am just very frugal.
Railroadjames( if only we wised up)
Do you think the railroads could ever make a comeback? Freight costs are getting to be a real issue. And trucking companies are probably the biggest barrier to getting cleaner diesel in this country. I'm sure one semi pollutes more than dozens of cars.
Railroadjames(trains are fun)
me: well if rationing was ever required, I'd want to make sure that the really frivolous uses of gasoline were curtailed first. No gas use for pleasure boats , RV's, and other purely recreational vehicles, would be a good start. Then everyone can quit wasting gas in lawn mowers, to make your lawn look pretty.
And if gas does go to $3, the people who will be hurt are the lower-income. People who have $30K + to spend on a car are not going to buy a Focus because their gas bill is $2000 or $3000/year.
Railroadjames(Big car sales has to be drying up)YES?
I am sure there are many things we could agree on. I believe that wasting fuel is bad. I also believe the American public are getting the shaft by politicians that pander to lobbyist on both sides of the table. The shipping industry has blocked attempts to clean up the pollution by trucks and ships. The environmentalist's lobby settle for band aids on the pollution issue by forcing higher standards on the little guy. And it is considered a step in the right direction. Consequently the only high mileage cars that are allowed in are overly complex such as the hybrids. If our politicians were interested in clean air we would have clean diesel and 50% of the vehicles sold would get the mileage that we get with a few hybrids. If I buy a car in the next few months it will be a diesel. If gas goes to $5 per gallon I can ship the vehicle to Hawaii and live on my farm and get biodiesel for under $3 per gallon. It will not be affected by high gas prices for a quite a while. I do fine on papaya, bananas & mangos. And I can work on my own car without Toyota to tell me they have never seen that problem before. As much as you feel that hybrids are the answer to gas shortages, I feel diesel and specifically biodiesel is a better answer. Only time will tell which is right for America
I kow it's easy for these discussions to branch off into other areas, but try to stick to the topics as much as possible. Thanks!
PF Flyer
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News & Views, Wagons, & Hybrid Vehicles
PF Flyer
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News & Views, Wagons, & Hybrid Vehicles
I agree that only the poorest among us will be impacted by higher gas prices. They are the ones that cannot afford new cars that are more fuel efficient. They buy $300 beaters and drive them till the wheels fall off. I know my son delivers Pizza in the winter in Alaska when construction is slow. His 4Runner is not the best on gas mileage. Housing is a much bigger burden for him.
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News & Views, Wagons, & Hybrid Vehicles
Thanks!
As long as supplies were un-interrupted you wouldn't see any rationing - the rationing would be self-imposed ...people would drive less, use mass transit more, maybe you'd see a huge boom in telecommuting (work from home).
Just by coincidence, I bought a new Intrepid right around the time gas prices started shooting up in late 1999. I had to really run the hell out of it to get worse than 20 mpg, so even when gas was up to $1.50-1.60 per gallon, I was still better off than when I was driving an 11-13 mpg Gran Fury but only paying $1.15 or so per gallon.
Now though, that prices are up to $2.10-2.20 per gallon around here, that's putting my Intrepid back up to around the same cost per mile as those old guzzlers were back in the day.
If I needed a second job today that brought in a lot of quick cash, I definitely would NOT deliver pizzas. I think nowadays I'd get a job as a waiter or bartender.
Hopefully the delivery companies are paying their drivers a bit better these days to compensate for fuel prices. When I quit back in 2000 I was making $6.00 per hour, and the company paid me $1.00 for every delivery, plus the tips on top of that.
As for my regular job, well I only live about 3 1/2 miles from work, so $5.00 per gallon gas probably wouldn't change my choice of car. However, I probably would cut down on "unnecessary" driving.
I think pizza delivery is one of those things that could get hit extra hard by rising fuel prices, because the driver really gets put between a rock and a hard place. The driver has to pay more for fuel, but might not be compensated appropriately by the store. And if the prices go up, then the customers are going to complain and not tip the driver as well.
And if the driver doesn't make enough money to justify doing that kind of work, he's going to find something else to do, which could actually make for a shortage of drivers if too many of them get squeezed. I know, for example, the store I used to work at did so poorly in the years after I left (I'd like to think my leaving had something to do with that ;-) that the company sold it off and now it's a privately-owned franchise.
I'm guessing high fuel prices will make all sorts of other things go up in price, like groceries, building material, just about anything that's delivered by truck or train. Since most locomotives are Diesel-Electric hybrid, I'm sure rising fuel prices will hit the railroads, too.
The people who seem worry about it the most, justified or not, are entry level white-collar commuters. They tend to accept longer commutes and have a longer list of "necessary" expenses like broadband internet (well, it is!). They also drive a lot more unecessary, non-commute miles, so when they pay a lot for gas they feel guilty because a lot of it is by choice.
The hybrid hype has hit them hard, and my recent graduate friends are always asking me about them, even though they'd be stretching to buy one at current market prices. No one seems to realize how many miles they'd have to drive a year to actually save money.
And lots of them who would've bought a small SUV might go for the car version, but few of them would've bought a Suburban or F-150 anyway.
Those who do buy those vehicles (I'm thinking wealtheir suburbanite families) would survive the gas prices. So some'll keep the things, but for most families they're a low priority, and money not spent on the gas will go towards the other luxuries such families enjoy. There'll be a boom among high-end hybrids out of image and hoped cost savings. The only segment I see really suffering is the 4-door large pickups. At that size, it's the three-row-of-seats vehicles that'll survive best.
But $5 in 2010 money wouldn't be too bad. If it gets there GRADUALLY, I think people will shrug it off.
If there's a jump and a panic, GM's really screwed because their upcoming truck line is their only real hope in the near future. The streets will also be a little scary when commuter parents give the big vehicles to their (low-mileage) kids. Toyota and Honda will make a killing on high-end hybrids, and continue to make money on small cars. Not sure the domestics will do either.
I can't recall how many times I made a purchase, and was getting less than two or three dollars change, and told the clerk "put the change on pump two" because I needed gas to get home and to work again before payday, but not enough to fill up.
Thankfully, I am past those days, but there are probably MILLIONS of people who are in that boat...somehow trying to afford enough gas to make it until payday. It's not easy for them when gas goes up 37 cents in one year like it has recently. If it KEEPS going up, it makes it harder for those people and harder for the middle middle class too, which is where I sit. If I have to spend $65 to fillup my Honda Civic Hybrid at $5 a gallon, the folks who make $20K a year are going to be HATING LIFE trying to keep fuel in an old beatup gas guzzler.
The key word there is SO FAR - gas is "only" at around $2.15 (at least where I live)
Exactly - if it jumps overnight, that would be disasterous to the economy - panic, waves of inflation, etc....
If it happens gradually, it will be a lot less painful, people will adapt, that's just "normal" inflation
$5.00 per gallon would be seriously ahead of inflation. And that's REALLY going to put a strain on poorer people. They can't necessarily afford to go out and get a newer, more fuel efficient car, so they have no choice but to make do with the old gas guzzling clunker.
Mainly, I meant in post 24 is, if it goes up gradually it still hurts but it's not a killer...if gas is suddenly $5 a gallon in 2006, it would be economic disaster.
me: I would guess they'd be making more by then; but yes I think we all agree that it will be the lower income people who are affected the most. It may require a change in lifestyle.
If you look around the world, we are about the only country where everyone can afford a motor-vehicle, or at least to run them as much as we do.
The interesting aspect of energy cost increases though is that every $ that goes towards energy could have gone towards savings and retirement. If you're 20 or 25, you better not be complacent and feel you can afford $5 gas, because SS isn't going to be the same when you retire.
The best thing people who don't have much money can do is not to own a car. It solves all these issues. Live close to work, and bike or walk.
If we are paying $2.15 a gallon with oil at $55 per barrel that would calculate out to $110 per barrel for gas costing $4.30. The magic price for oil is $80-$90 per barrel. At that price both making fuel from coal and extracting shale oil becomes economical. We have huge reserves of both shale oil and coal that can be used if the price reaches that $90 level. Unless the government adds tax to compensate for cars using less gas the chances of gas going much over $3 per gallon is slim. Some of the current price increase is due to our lack of refining capacity. We need to expand our refineries soon. Buying cheap gas from other countries is not good business.
Oh my God! Yuck! What a miserable, dull, ugly decade for car enthusiasts! Fortunately, I live very close to my workplace. I could probably walk to work if I got up earlier. At $5 a gallon, it would take $100 to fill my Seville STS and $125 to fill the Brougham. Provided I don't suffer any serious blows to my income such as a job loss or major illness, I could endure. I would definately cut back on some other expenses. If it got bad enough, I'd cancel my cable.
OUCH! I don't even want to THINK about spending $160.00 to fill up the truck! 8-(
I'm not seeing $5 gasoline in 2010, but I have made some changes in the past year to simplify our lifestyle and aim for retirement in 12 years or so. In doing so, we have made some changes to reduce our energy bills at the same time. We decided to move to a newer, smaller, more energy efficient home that is closer to work. I am going from a 40 mile round trip commute to a 7 mile commute. Our heating bills hit $200/month this winter for the first time and my wife and I are considered Polar Bears by our friends (67 degrees). We figured that as long as we were moving to lower our maintenance, we might as well maximize our benefits and cut the energy bill as well. Admittedly living in a medium sized town in the mid-west, we can do that much easier than someone in L.A or other large urban area, but I do hear the same ideas from some of my co-workers. It not only lowers the bill at the gas pump, but should make my cars last a lot longer too, which is where the real savings will come.
The typical American has a job, and a commute, and 1.2 kids. Those kids have to go to school, to the doctor, to the dentist, to dance lessons, etc., and most of the time, trains or public transportation "do not accomodate" those travel needs.
If I could
a) take a bus or train to work and
b) have a bus route between work and my kid's school and
c) have a bus route to all my errand locations
then I would happily use public transporation !
The problem is, there are not frequent routes that would take my kids and me to all the places we need to go.
I would LOVE IT if there were, but there are just not routes like that which run at a schedule which accomodates my own schedule.
So in reality, high gas prices affect the pocketbook of average USA citizen more than the high prices affect most European citizens. I will pay my $5 with a grain of salt if the day arrives, but I will be forced to do so more than doing so willingly.
well come over the pond to the United Kingdom where petrol prices are already 90 pence per litre and the price of diesel is above that so actually we already pay just under £5 per gallon which is about $7.50 a gallon. It costs me £120 to fill my Chevy G20 with diesel. You are so lucky to have such cheep fuel. However we have free medical cover, so I suppose one cancels out the other and my health is far more important than my vehicles. Incidentally as far as economics go, and I aim this at the person who made a generalised comment about countries who's motorists pay over $5 a gallon, I think you will find that the UK has the most stable and vibrant economy in the world, thanks to a Labour Government, even with fuel prices above $5 a gallon.
The EU pays the same for crude as the USA. It is the horrible taxes in the EU that make their fuel costs very high. This is a good chart showing that our gas is less than half of the cheapest country in the EU. Our diesel is overpriced currently.
http://www.see-search.com/business/fuelandpetrolpriceseurope.htm
Welcome to the Edmund's forum. You make a valid point about your healthcare being less though your petrol is expensive. My company pays about $950 per month for my healthcare. It is not nearly as good as it was 20 years ago. I know this is not the right forum to discuss other than fuel costs. You do give us food for thought. As far as riots I don't think it will come to that. Prices will go up incrementally and not seem so horrible. I don't see us going to the prices you have in the UK. We would vote anyone out of office that tried to get that much tax from us.
Really? Free? Are you sure about that?
The government just "finds" money flying out of thin air and decides, out of the goodness of their heart to offer "free" healthcare?
It may be government supplied healthcare (hmmmm, I wonder if that would be akin to 'public housing' in this country), but it is NOT "free".
As for us in America, it would be just another normal day, drilling out all of Alaska, driving Hummers and Expeditions ... and still whine about the high price of gas............
Sorry expioneer, I just couldnt resist, but that is almost a true picture if prices were to almost triple......
How is it free when you are paying a far greater portion of your income to the government system? What quality of care is the "free" system? My friends who work for the NPS all pay for private insurance (just like my Canadian friends head to the Cleveland Clinic for their heart bypasses).
You pay for everything in one way or another.
What about rationing in our future? Does anyone doubt that possibility? Tonight's ABC Evening News seemed to be telling us that things could be on the brink of serious problems. Some serious issues with the Middle East.
Railroadjames(Know who's getting more exercize than us.....the guy changing gas prices on the marquee)
Short-term anything can happen. That's why we now have a strategic reserve of oil. And remember that the OPEC countries have a very, very substantial interest in assuring that the world economy prospers. They will try and make as much as they think is reasonable without putting the world into a recession. They want moderate growth. The hundreds of billions of $ they have invested in western businesses will assure that.
By the way, you're not doing a good job of hiding your glee at an idea that helps no one, and hurts many. Not very nice IMO.
Is that the same ABC news that faked the Chevy Truck blowing up on impact? I would think you would tire of the doomsday rhetoric. No real facts corroborate your prophesy of $5 per gallon gas. If oil goes up above where it is the other countries of the world that are buying more oil will have a worse problem than we will. Your projection of $120 a barrel oil is totally unrealistic. Fortunately we still have the biggest guns in the region where a lot of the oil is stored.
It is stable now, but unless the Labour Government has found a way to repeal the business cycle, the good times will come to an end. They always do.
Incidentally, the real "thank yous" for that stable and vibrant economy should be given to Margaret Thatcher's Tory Government for repudiating much of the nonsense perpetrated during the 1960s and breaking the backs of the militant unions.
To prevent the increase in crude oil prices from showing up at the pump, Great Britain and other European countries would have to reduce the amount collected in taxes from each gallon of gas or diesel fuel. Since that is highly unlikely (as they need the money), gasoline and diesel fuel prices will rise in Great Britain and continental Europe, too. So our prices won't necessarily "catch up" to those in Great Britain or continental Europe.
railroadjames: The only reason freight railroads have bounced back is because they now work in tandem with trucking companies to ship items. They grow together...one mode of transportation doesn't grow at the expense of the other.
You want facts. Go to OIL.com and you'll find a vast array of indicators that point to up coming problems.
One more serious point that should concern everyone....The Middle East and outlying countries currently in termoil are at risk of sabatage. The insurgents that are fighting their holy war would like nothing better than to see world oil supplies & manufacturing brought to their knees.
I find no satisfaction in this forum when it comes to indifference to the signs that are becoming all too real. These gas prices are real enough today. Some areas are as high as $2.60 a gallon for reg. Lastly those of you that think we will solve our problems with reserves and coal & shale are opptimistic at best and unrealistic at worst. On that ABC evening news tonight were several Reagan and Bush advisors warning of the coming events that can only be avoided if we, as a country, change our wastefull ways. 'Nuff said.
Railroadjames( aren't we getting tired of traffic jams that we sit in wasting gas going nowhere?)
I rarely go out in rush hours. How are hybrids improving the congestion. It looks to me like the hybrids encourage people to drive more miles. If we are using so much more oil now than 20 years ago where is the gas coming from? We have not built a new refinery in over 20 years. The truth is we are driving more miles on the same amount of gas. Higher mileage vehicles do not encourage people to drive less. We are still far below the gas prices of 1979 when adjusted for inflation. Fuel prices & interest rates in the late 1970s nearly bankrupted me. The worst financial period of my life. We are much better off now. People have enough money to buy high priced hybrids with low interest rates.
For me, I assume I'll be in my home longer than with the same employer, so I might as well buy a house in the area I want to live, since who knows where my job will be located in 5-10 years. (Hopefully, not overseas, but my employer is trying to outsource the entire accounting function, so stay tuned.)
I'm going to 4 ten hour days, so I can avoid driving one day a week.
If anything the fact I work from home has been an advantage. I have changed responsibilities and am not exclusively dealing with the local office, however it doesn't really matter. Know a co-worker who went even farther, moved from Massachusetts to Florida were there wasn't even a company office and is still doing the same job.
So let the price of gas go to 5 Dollars, it will not be increasing my commuting costs.
Why the big gap? It's the tax we pay...and therein lies the difference between the Europe and the US. I won't go into the politics of high tax versus low tax economies, as I can show excellent examples of both (Singapore and Sweden).
However, if I was the average US car user, I would worry less about the effects of price of crude on my wallet and more about how the budget deficit will eventually drive prices up.
There's a body of thought gaining momentum with the Central Bankers of the US' largest trading partners (China, Korea and Japan), that holding FX reserves in a weakening US$ is a game of poker with no out. Much as they would like to convert their reserves to alternative currencies, the first one to break rank will pull the whole house down.