Gas prices are rising. And consumers want to know why and what they can do about it. This article provides some practical tips on how you can save money on gas. Some of these tips will help you specifically save money on gas and some will help the "bigger picture" that affects gas prices worldwide and specifically here in America.
Why Is Gas So Much Money?
Gasoline is one of the main products refined from crude oil. Its primary use is in automobiles and light trucks, though it is also used in other equipment (tractors, RVs, boats, etc.). According to the Energy Information Administration (EIA), the gas is piped from the refineries into a "massive distribution chain serving 168,987 retail gasoline stations in the United States." And the price? The EIA explains:
The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners, refinery processing costs, marketing and distribution costs, and finally the retail station costs and taxes. The prices paid by consumers at the pump reflect these costs, as well as the profits (and sometimes losses) of refiners, marketers, distributors, and retail station owners.
The most important factor in the price you pay for gas at the pump is the cost of crude oil. From the mid-1980s through the early 2000s, the inflation-adjusted price of crude oil remained generally below $25 per barrel. Then, everything began to change. By October 2007, the price was climbing to over $90 per barrel. And, as of May 2008, prices are reaching toward the $130 per barrel mark.
In addition to the cost of crude oil, there are the other costs (refinement, distribution, taxes, etc.). And the combination of all these factors is spelling pain for the American consumer. While the pain is felt worldwide (including in developing countries like India and China), US consumers are particularly feeling the pinch, given the cultural significance of the automobile in the US.
How to Save Money on Gas
What can an individual American consumer do to save money at the pump? Here are a few tips:
- Plan your days and weeks more carefully, making cost-conscious choices as to when and where you need to drive. Sometimes, better coordination and planning can save a few car trips each week.
- Try to move your extracurricular activities closer to home (i.e., find a church closer to home, participate in your neighborhood sports league - instead of driving across the county, etc.)
- Carpool and/or talk with your boss about telecommuting
- Shop more over the Internet
- Make sure your vehicle(s) get(s) a regular tune-up
- Get a better air filter for your car(s)
- Consider a gas credit card or a membership card (but look carefully at the benefits and savings)
- Avoid fast acceleration and hard braking - strive for consistency in your driving
- Minimizing "idling" your car - as this can burn up gas for no reason at all
What You Can Do as a Citizen
The purpose of this article is not to get too political, but there are some things you can do to help the "bigger picture."
- Write your local and state authorities to encourage them to allow for more telecommuting (for their employees), encourage and facilitate more carpooling, and/or provide more environmentally sound and fuel-efficient technologies for their vehicles
- Call or write your US senators and US House member to ask them to reduce the tax on fuel. Federal taxes account for almost 19 percent of the price you pay at the gas pump.
- Call or write your US senators and US House member to take steps to reduce US dependence on foreign oil. This would include research and development of alternative energy sources as well as more domestic oil drilling.
By looking at the situation as an individual consumer as well as a citizen, you can help make a difference in not only your own pocket book or wallet - but also in society overall.
