Where's The Cheap Gas At?
by TOM BISKNER
Finding cheap gas has been a top priority for people in America for the last few years or so, but it has only been in the last few months that the high gas prices have really started to substantially hurt our wallets. When the Gulf War started in 1991, gas rose to around $1.30 per gallon in my area and people wanted to riot in the streets. Not that there wasn��t good cause for such concern since the average cost of a gallon of gas prior to that point in time hovered around one dollar per gallon. So in reality, this was equivalent to a 33% price hike in just over a period of a few months. At today��s prices, that would be equal to a jump from $3.35 per gallon to $4.45 per gallon in a fairly short amount of time. The saying has been for quite while that adjusted for inflation, gasoline is still not at its all time historical high. The previous record average for high fuel costs was set in 1981 with an adjusted price of $3.15 per gallon. That benchmark had been surpassed, however, in 2007; now making the average price of gasoline the most expensive it has ever been in US history. So getting to the topic at hand; where is the cheap gasoline? This can be looked at in a couple different ways. For one, why are fuel prices at such records highs, and two, where can you find cheap gasoline, if you even can? The first part of that question is a lot easier to answer then the second. One of the biggest reasons gas prices have gone up so high is the extra demand for fuel by emerging nations. For example, China��s increased fuel consumption is responsible for over thirty eight percent of the total growth in world oil demand. Couple that with the rapidly rising Chinese currency versus the declining American dollar and you can see that cheap gas is easier to come by in China, therefore the demand continues to climb. The next part of the equation has to do with refining capabilities. The refinery process is what turns crude oil into gasoline. In the 1980��s, there were over 300 refinery plants owned and operated by big oil companies in the United States. This really helped in maintaining cheap gas prices. That number is now down to under 175. The main reason for this? Less refineries keeps supply limited. And with a large demand that limited supply helps keep prices high. But big oil company profits are not the entire reason gas prices are high, as there profits account for only twenty nine percent of gas costs. There are also several small and large players that have there hands on fuel prices as well. From the start, oil is located and retrieved, and then the barrels of oil are sold on the open market, transported, refined, transported again, and then sold at your local gas station. There��s also a gasoline tax on every gallon of gas sold. In the last 15 years or so the gas tax accounted for almost fifty percent of every gallon sold, but now that number is down to around fifteen percent. So will we ever see the return of cheap gas prices in the United States? We will probably never see $2 per gallon gasoline again, but it is possible they we may see a gas price ��bubble�� that may bring a price correction later down the road. What would precede such an event? It could be such things as a strengthened US dollar, a substantial decrease in fuel demands due to a dramatic increase in highly fuel efficient vehicle purchases, or just a decrease in fossil fuel demands overall due to developments in alternate energy sources. But is there anyplace to find cheap gas? You can start by visiting a gas price tracking website like gasbuddy.com or gaspricewatch.com. These websites are databases that allow you to search viewer submitted gas prices in your area and compare different gas stations to find the best price. Don��t expect to find any huge savings, but it is a start if you��re looking to maximize your fuel budget. The next best choice would be to buy a used car that gets high gas mileage. You can check fuel mileage ratings for a large variety of vehicles at the EPA��s website devoted to the subject.
