Tuesday, April 3, 2012

Gas prices too high?

THIS project is in no small part about fossil fuel independence.  I haven't figured out the end-game yet (whether whether bikes are saving the planet or not), but I am learning a little bit about the effect of gasoline on my pocket book.
Last night, I filled up the 16-gallon gas tank in my 2004 Toyota Camry for the first time since I began this project.  I know EXACTLY how I feel about this.



It may be a selfish reason for bicycling for transport, but it is one of many legitimate reasons (as a reminder, I decided to do this for fitness, cost, earth/environment, and the bicycle's romantic appeal.)  So, this post will be my first foray into the messy business of petrol.


I've always heard that I shouldn't complain about the price of gas, as it is still cheaper/gal than just about any other liquid that I may use on a day to day basis:
Milk (my favorite beverage)    $4.98(ish)
Apple Juice                             $5.96
Irish Spring Body Wash          $24.75
Pantene 2-1 Shampoo/Cond.  $38.40
Colgate Total Toothpaste        $55.89
After Shave                             $137.94
Liquid Paper                           $849.86
Hugo Cologne                        $2025.89
(Walmart pricing)

So, relatively speaking, gas isn't all that expensive (though I sense that if I used a gallon of Hugo Cologne every day, my life would become vastly more complicated).  Well, how does the cost of in the US compare to that in the rest of the world? Let's take a look...
USA -         $3.90(ish)
Turkey -      $11.20 (highest)
Venezuela - $0.10 (lowest)
Japan -        $7.10
France -      $8.20
China -        $6.55
UK -           $10.90
(mytravelcost.com & gasbuddy.com)

So, where does the price of gas come from?  Well, trying to stay out of politics here, but I've seen people blaming the president for the price of gas.  From the research that I've done, it doesn't seem that he sets the price of gas.  I've seen posts on Facebook that point to the increase of the price of gas from the date of his inauguration to today.  Interesting, until you take a larger historical sample:


ANYway, it seems as though the price of gas can increase not matter who the president or the party involved.
To figure out how the price of gas is reckoned, I checked out a neat article at "How Stuff Works."  Among all of the info on that page, I discovered:
-Americans drive nearly 3 trillion miles a year (820 round trips from the sun to Pluto!)
-We use 178 million gallons of gas a day (not all in motor vehicles, though)
-We don't just pay for gasoline (taxes, distribution and marketing, refining, crude oil, station mark-up)

The price of crude is determined by the world market (the old supply/demand stuff from Econ 101), taxes are decided locally, and local station competition can drive prices down.  But why do many Europeans pay over $10  for gas while Venezuela pays just 10 CENTS?

For years, gasoline has been subsidized by the Venezuelan government, driving down the cost of gasoline.  The country is also rich in oil deposits.  Combine this fact with government subsidies, and low-cost-gasoline has become a sort of birth-right for native Venezuelans.  The debate is raging over the effect such a subsidy will have on that country in the long-run, but for now, citizens are a enjoying the low cost of gas in an otherwise challenging country.

In Europe, meanwhile, taxes on gasoline have helped push the cost of gas through the roof.  Turkey faces a tax of $5.20 PER GALLON!!  One thing that Europeans have that Americans have not, however, is an ubiquitous rail system.  I wish I could speak from first hand experience, but it seems as though one can get just about anywhere in Europe at just about anytime for a very reasonable price.  I can't help but wonder (in the context of this project) if the cost of gas in Europe is related to the propensity towards cycling...hm!

Yes, I will continue to complain about the price of gas.  AND Yes, I will continue to do my best to avoid having to use it at all.  Afterall...

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