Showing posts with label gasoline prices. Show all posts
Showing posts with label gasoline prices. Show all posts

Tuesday, June 24, 2008

Gallons per mile versus Miles per gallon

CNN ran an article that NPR had reported on last week. It suggests a way of thinking of gas mileage in longer terms by looking at gallons per mile instead of the more traditional miles per gallon. It's along the same lines of my gas saving suggestions from the other week.

I also saw that the Bluewater Wind Power contract finally seems to be a done deal. While I have yet to see exactly how much 200 megawatts is compared to the total energy grid (preferably as a percentage), at least on its surface it would seem to be a way of saving money. It also gives me some ideas for a greater energy policy the next governor or president can tout, and I'll have to think about that a little more and write about it another time.

Monday, June 9, 2008

Gas crosses $4 threshhold

As pointed out by one of the most left-wing cable news programs that I tend not to watch, the price of a gallon of gas in 2001 averaged $1.47/gallon. This morning when I filled up, it was $3.93/gallon. When I drove home, it had jumped ten cents. Well, at least Delaware is consistent with the national average. How unfortunate, and yikes!

One thing it would be interesting to track would be what a price of a gallon of gas was based on the closing price of a barrel of oil the day before. So, when gas spiked to $138/barrel on Friday June 6, the corresponding gas price would have been $3.93/gallon or so. I alluded to the fact a little more than three months ago that it seemed fishy that gas prices had such a quick lock step with the price of a barrel of oil, which would suggest some sort of illegal collusion or price fixing. Perhaps. Perhaps not.

A barrel of oil around that day (Feb. 26, 2008) was approximately $103/barrel. It's hard to tell what the rate of change is based on two random data points, but I think everyone can agree that the price of a gallon of gas isn't going down any time soon. It certainly would come at no surprise that if three months from now, we're paying another dollar more per gallon. The question is how much more is too much more before the working middle class is even more squeezed out from making ends meet.

Here's a thought DART - run more buses to more locations and more often. Or maybe as part of a broader economic stimulus package we should think more seriously about a regional mass transit system running down the middle of the state and along side or in the middle (raised) on parts of 13 and 1. I've suggested as much before; maybe I will have to give that idea some more thought and elaborate to see if it gains any steam.

Tuesday, May 13, 2008

Gas prices continue to soar and some suggestions to save money on gas

With gas now topping $3.66 a gallon around Dover, I'm a little surprised by the gas stations that are punishing people for using their credit cards to pay for gas by upping the price of a gallon by as much as ten cents if you use your card. That, at the very least, is the definition of extortion. Of course, you can always choose to go to Valero or some other station that doesn't attempt so blatant a rip off.

One of my friends who has a Prius has been explaining me the virtues of getting 50 miles per gallon (he said he typically averages about 45 mpg). For $30,000, it's nearly worth the price if you can afford it. If not, he tipped me off to some things he has noticed that anyone with a car can do, which should save a few bucks.

The biggest gas rip off, according to the Prius gas mileage meter is accelerating off the line. This apparently has been tested nationally and common sense should tell you that it works. While I can't give you the percentage of gas it saves, it only makes rational sense that if you hear the engine revving up, it means that gas is burning up just as fast. The solution? A slow acceleration off the stop line should increase fuel efficiency. Rather than going from 0-60 in 5 seconds to hit the next light just as fast, just ease into it. Who cares if you get passed by someone on the other side?

The other solution is simply to drive slower. In a state as small as Delaware, sticking to the 55 mph speed limit along most roads will get you there just as fast as going 65. Here's why going that much faster is just dumb or not worth it. There's a light every two miles! The odds of you hitting one somewhere that will slow you down just as much is 100 percent.

Another way to think about it is to look at the drive from Dover to Wilmington (or Dover to the beach), which is about 70 miles. Let's say your car averages 25 mpg and carries 15 gallons in the tank (giving you 375 miles on a tank). Assuming you hit no lights (which is a big and really unrealistic assumption), going 60 mph will take 70 minutes. If you go 55 mph, the same trip will take 76 minutes. If the average savings of 12 percent in gas mileage by driving slower is correct, those six minutes saved translate to a decrease of about three miles per gallon. Put another way, going 60 mph in our hypothetical car, your gas mileage drops to 22 mpg, and you'll get only 330 miles on that tank. Going 55 will get you approximately 420 miles. So the speeder (who gets there, at best, five minutes faster), will get almost 100 less miles on the same tank of gas.

Now for the trick, and why drivers should act rationally and drive slower: Taking four fillups at $3.50/gallon for our 15 gallon tank, that's $52.50 per fillup. At the average of 25 mpg, four fillups is 1500 miles. But the kicker is when you look at it this way: if you speed (even up to a mere 60 mph), your fuel efficiency is giving you only 330 mpg. This means you are filling up 4.55 times. At $52.50, this means you are going to spend $238.63 per 1500 miles. If you slow down and get that increase in fuel efficiency, you are going to fill up only 3.57 times for the same distance traveled, and spend only $187.50. It might only be a savings of $50, but that adds up over time (and who would refuse $50?). If you drive 15000 miles/year, you are saving about $500. That's almost as much as the economic stimulus package if you had filed jointly and qualified. It translates to even more if you used the actual price of a gallon today ($3.60-3.66) or in a few months ($4+).

Things to think about. Obviously the numbers can be manipulated rather easily, but it is just as easy as driving a bit slower and engaging in a slow acceleration off the line. Perhaps this idiotic drivers who seem to be in a big rush to get to work have money to burn, but in this economy, I would venture to say that most, including myself, don't, and all could certainly use an extra $500, even if it's in unrealized savings.

Tuesday, February 26, 2008

The rising cost of gasoline

Every week it seems that the price of oil hits a new high and the price of a gallon of gas is in lockstep behind it. In Delaware, at least in Kent County, it ranges from somewhere between $2.99/gallon and $3.05. Soon, or so the news is starting to scare us into thinking, it's going to be $4/gallon. I would not be at all surprised when this happens. Here's some thoughts on what should be done about it.

My curiosity begins with how the price of a gallon gas can jump so high (and even more quickly) on oil futures. Last week the price of a gallon of gas was $2.90, and then poof, the price of a barrel of oil jumps over $100, and like clockwork, gas jumps to over $3.00/gallon. Exxon, Valero, Sunoco, and the rest of these energy corporations must have secretly developed some sort of supersonic oil refinery jet that can take these pricey oil drums from the Saudi oilfield directly to the tanks at the local Exxon in a matter of hours.

I'm all for profits and business, but it strikes me as even more curious that the country is heading into a recession (or, more likely, is already in the shallow waters of one), and all of the major oil companies are receiving record profits (profits, not sales) on a quarterly basis. Something about that just doesn't sit right. It shouldn't be sitting right with the Federal Government, and it shouldn't be sitting right with any of the 50 state governments. As put better by Hamlet, something is rotten in the state of Denmark and it smells like gasoline.

Notwithstanding our economic troubles and the unfundable concept of universal healthcare pedaled by the candidates daily, the price of gas and travel is just as major an issue for the candidates, if not more so. But it need not wait until November to be addressed; the Congress (including these current Senators) could be doing more about it now. The fact that the Congress is in need of some oil leads me to think that it's no longer a congressional problem, but an executive one.

The cries of foul by the States have gone unanswered long enough. It's been almost two years since the president has called for an investigation, and yet the price of gas continues to rise. Frankly, this tax rebate isn't going to even put a bandaid on the problem.

As much as I loathe for the government to get involved in private enterprise, maybe it's time for the Attorney General (of both the US and the individual states, to the extent that the profiteering is hurting states) to crank up the wheels of justice and do some good old fashion trustbusting. Or at least start regulating this industry a lot closer. I can't imagine that the Sirius-XM merger nearly warrants the expenditure of so many resources.

I concede that this is primarily a federal issue, and in the end, the government may have to regulate this industry a little closer by either a tax on all profits over X% or some sort of disgorging of profits if there actually is collusion at the expense of the public. Nevertheless, I'm surprised that given the state of economic affairs, at least in this recession-vulnerable side of the country, more isn't being done about it at the state level. After all, everyone is paying for gas, and the rising cost of this luxury-commodity is breaking the banks of everyone. Everyone, that is, except those running the oil show.