North Americans softened up on cheap gas
By: Drivers.com staff
Date: 2004-05-28
"You're the cheapest," exulted a customer at a Toronto, Ontario, gas station. "I've been all over the city and you're the cheapest."
Many drivers seem to take an almost obsessive interest in finding the cheapest gas prices. Perhaps that explains the recent popularity of web sites such as gasbuddy.com, which allows visitors to post their exciting findings about cheaper gas in their area. Recently, they announced they were getting half a million "hits" per day. It's almost as if getting the best price for gasoline were a game for motorists, with the prize, in many cases, being little more than personal satisfaction at beating the system.
Europeans must be somewhat bemused by the North American protests against "high" gas prices.. In Italy, gas prices are about 1.10 Euros per litre. At the current exchange rate of about 1.2 dollars per Euro and at four litres to the gallon, that's about $5.32 per gallon. In England, it's even more – as much as $6.50 per gallon.
However, high fuel prices are built into the European transportation system. Fuel sipping cars, such as the "Smart Car" which gets about 60 miles per gallon, offer automobility at a reasonable cost. Pop $30 worth of gasoline into a Fiat Punto or a Ford Ka, and it'll get you around for a while.
North America, on the other hand, is out on a limb. Highly dependent on the automobile and with urban sprawl extending average trip distances, Americans are now becoming "victims" of cheap fuel policies which have lured them into purchasing larger, gas guzzling vehicles – SUVs, minivans, light trucks, and even recreational vehicles that may get as little as 3 to 4 miles per gallon.
With today's record gas prices, coping strategies are the order of the day. Radio, TV and newspapers have tips for fuel efficient driving, trip planning. But the effects of higher fuel prices could be more profound.
"America's reliance on the automobile and the highway system are at the very heart of our unequalled affluence," wrote Wendell Cox & Jean Love in a study reported back in 1999. "The highway system, which carries an overwhelming portion of trips, provides unparalleled personal access to employment, education, recreation, cultural, and shopping opportunities for both rich and poor. America's vibrant trucking industry ensures the competitiveness of the freight transportation industry, which contributes in no small measure to affordable consumer prices."
Higher gas prices, say Cox and Love, won't decrease driving very much in a society that is automobile addicted and automobility dependent, but they will have other effects.
"Increasing the price of most products reduces their consumption. But some goods and services are more important than others. In response to a price rise in milk, most parents do not reduce milk purchases for their children. They reduce consumption of less important products, while continuing to purchase the same amount of milk for their children. Just as parents value milk for their children, most people value driving.
"While higher gas prices do little to discourage driving, they do destroy jobs and increase the costs of virtually all goods and services. Higher gasoline prices exact a high cost on all sectors of the economy including those who do not drive."
If high gasoline prices continue, North Americans will have a lot of adapting to do. More wealthy motorists may not worry too much about the price of fuel, and they have the have the option of selling their gas guzzlers and purchasing newer, more sophisticated and efficient vehicles, such as hybrid-fuel cars. The less wealthy may wind up buying second hand gas guzzlers, thus adding to their economic woes.
- FuelEconomy.gov
- Calculate your trip costs: great AAA site
- AAA index to prices in different states
- Gasbuddy.com -- sharing your gas-price information
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