Fuel Price Amnesia

By Kevin Miller

12.09.2008

I’m a smart guy, but I can’t remember everything. The past week presented two prime examples of that fact. The first was that upon the birth of our second daughter, I didn’t remember just how little sleep I’d be getting with a newborn in the house. When she arrived on Monday morning, it quickly became evident that I will spend the next several months being severely sleep-deprived. How could I have forgotten that?

The second example that I can’t remember everything has to do with gas prices. When I filled my Volvo with premium unleaded for $2.01 earlier this week, I was shocked. I couldn’t remember the last time I’d paid so little for premium fuel. And I couldn’t even remember how much I had recently been paying. Was it really over $4.00/gallon just a few months ago? Or was it merely approaching $4.00?

A little research shows that yes, as recently as September, gas prices were at their highest, and in Washington State I paid just over $4.50/gallon for premium unleaded. So now, just three months later, I’m filling up for less than half of the price I had been paying. Digging a little deeper, I found that the last time fuel prices were this low was briefly in the first quarter of 2005; it was the first half of 2004 when they were regularly that low.

With fuel prices like I’m seeing this week, who needs to conserve? I’ve been driving my all-wheel drive wagon instead of my wife’s more efficient sedan, I’ve been making extra trips, and yes, I’ve even been contemplating taking advantage of the generous dowries incentives on a bigger, thirstier car for my growing family. Of course, I do remember that my wife is going to be staying home with the new baby instead of working outside of the home, so perhaps now isn’t the time to take on a new car payment. But I digress.

I’m an auto writer- I pay attention to things like cars, fuel consumption, and gas prices. How did I get so out of touch with fuel prices? How could my memory be so short that I don’t remember the “pain at the pump” from just three months ago? And with that being the case, how many other motorists have forgotten as well? Are the few remaining new vehicle buyers once again choosing inefficient, larger-than-needed vehicles and taking wasteful extra trips because they don’t have to worry about the extra expense? It is certainly tempting to do so with fuel prices suddenly so low (and incentives on large vehicles so high).

While the fact that fuel prices are down is very good for our nation’s household budgets, it isn’t necessarily good for our goal of reducing foreign energy dependence. When consumers see gas prices so low, they aren’t financially compelled to use less energy. So energy is used inattentively, even carelessly. It’s not good.

Personally, I think that gas prices a bit higher than they are now are healthier for our nation as a whole. Higher fuel prices keep people thinking about (and paying attention to) their own energy use. Keeping consumption prices on consumers’ minds may cause them to make more efficient vehicle choices the next time they buy a car, which in turn should cause automakers to make efficient vehicles which are more appealing. And it will keep politicians’ attention focused on reducing foreign oil dependence, which is something far too important even for somebody like me to forget.

COPYRIGHT Autosavant – All Rights Reserved

Author: Kevin Miller

As Autosavant’s resident Swedophile, Kevin has an acute affinity for Saabs, with a mild case of Volvo-itis as well. Aside from covering most Saab-related news for Autosavant, Kevin also reviews cars and covers industry news. His “Great Drive” series, with maps and directions included, is a reader favorite.

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8 Comments

  1. You are 100% correct in your assessment.

    We perpetually discount past events as a form of denial.

    But denial is not going to solve the global fossil fuel supply crisis.

  2. I agree with your premise, Kevin. One interesting thing I heard on CNBC the other day was that oil consumption is still down compared to last year, in spite of prices being so much lower. Of course, that’s attributable to the terrible economy, not a sudden energy consciousness among Americans, and if prices stay at $1.75 for a while, small cars will probably again fall out of favor.

  3. Gasoline prices should be the same as in other advanced countries. That way we would curb our profligate ways.

  4. As painful as it would be, an increase in the tax on gasoline would ensure that we keep moving towards energy independence and alternative energy cars. Not to mention that whole pesky reliance on oil-producing rogue and/or muslim theocracy countries.

  5. Think yourself lucky at the huge fall in prices. In Australia, petrol has come down roughly only a third in retail while diesel has barely moved. In some markets, the markup of diesel over petrol has blown out to over 30%.

    You guys will be fine. People aren’t buying heaps of cars at the moment and there is a genuine worldwide recognition that fuel prices can only go one way in the long run….in the short term, at least there is some small positive out of the so-called “financial crisis”.

  6. You people are fools if you think that the price of gasoline has anything to do with actual market forces. It’s simply greed on behalf of the oil producers and their partners in crime, the oil companies, that shows up as price manipulation.

  7. I too wish that the prices would basicly stay about where they are now. The price is affordable yet enough of a reminder to watch your budget. The days of large SUV’s dominating the market need to be gone. Bring on the sporty, fun, efficient, and practical smaller vehicles.

  8. Just like the credit card companies, mortgage brokers, banks and the local dope dealer, OPEC countries vary their prices over time to get a higher average over-all price! Once you are “on the hook” with a larger car, and struggling with the rising interest rates, the price of gas goes up, and a dirty-rich little Arab rubs his hands with glee – Hooking Americans is as much fun as fishing in a barrel!

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