Gas Prices are Still (Relatively) Cheap

The media feeding frenzy over higher gas prices is just about to hit an all-time high as a gallon of gas will likely top out at $4.00 a gallon this summer. Now, I don’t particularly enjoy paying higher prices for anything (after all, I am the Frugal Dad), but if I hear another sob story in the news about higher gas prices causing all kind of social side effects I think I’ll unplug the television for good.

Last summer the mainstream media ran story after story telling us how many families were having to cancel their summer vacation plans because of high gas prices. Oh come on! Has anyone actually stopped to do the math here? Let’s assume the average family vacation involves a 1,000 mile round trip to Disney World. Your brand new SUV might get about 23 miles to the gallon on the interstate. Last year you spent about $3.25 on a gallon of gasoline. So how much more will it cost you to take that same trip this summer, assuming the price does hit $4.00 per gallon? About $32.60. A 1,000 mile road trip at 23mpg uses about 43.47 gallons of gasoline. The $0.75 per gallon jump from last year’s prices only makes your trip $32 more expensive. So for thirty bucks you are scrapping your entire summer travel plans? Gee, that’s too bad. I guess you could always go to Outback Steakhouse and spend $40 on dinner to make yourself feel better.

I’m always amused by the people who typically whine about gas prices. They are almost always smokers, or drinkers, or overinduglers in soft drinks, or some other vice. Have you ever thought to compare the cost of a gallon of gasoline to so many other things we consume? Check this out:

• 1 Gallon of Gasoline ($3.23 - the average cost in the U.S. at the time of this post)
• 1 Gallon of Skim Milk ($3.78 - my local Kroger store’s price)
• 1 Gallon of Bottled Water ($6.40 - assuming $1.00 for a 20oz. bottle in vending machine)
• 1 Gallon of Beer at a Restaurant ($19.20 - assuming $3.00 for a 20oz. frosty mug)

Try pouring a gallon of skim milk, bottled water or beer in your gas tank and see how far your car will go. None of these other products have anywhere near the cost-to-market expenses as gasoline. The components of gasoline must be explored, drilled, stored, shipped, refined and then shipped again before the product is worthy enough to fill your gas tank. Of course all that takes equipment and manpower that must be paid for out of gasoline sales. I’m not defending the profits of oil companies, but their margins are comparable to that of high-end clothing and overpriced technology gadgets.

Before you complain about high gas prices wrecking your budget, consider the relative costs of other goods and services you spend money on. For instance, last summer I griped about the cost of gas while paying for lawn treatments from a local fertilizer company. I realized how ridiculously expensive that service was and decided I could spread fertilizer and aerate my own lawn for a fraction of the cost. Others may spend twice their gasoline budget on eating out every month. The point is to not let the media give you an excuse (gas prices) to stay broke. There are plenty of other opportunities in our lives to practice frugality and help our bottom lines, even as the costs of other spending categories rise.

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