An Enormous Variance In Gas Prices

This morning we left Vassar and got gas in Poughkeepsie, New York, filling our tank at a downtown station.  Then we drove back to Ohio and, at some exit just east of Akron, topped off the tank again.  The same grade gasoline in Ohio was about 50 cents cheaper than the gas in New York — 50 cents!

I recognize that there can be regional differences in prices for commodities.  In the case of gasoline, the price at the pump can depend on supply routes, competition, proximity to refineries, and a number of other factors.  But half a dollar a gallon seems like a pretty extreme variance to me.

Although I’m sure the difference in per-gallon cost is caused by the various economic factors that affect price, it still made me feel sorry for the people of Poughkeepsie.  They’re living in a struggling area anyway, and now they have to pay far more for fuel than those of us who are lucky enough to live in a state where gasoline is significantly cheaper.  How is Poughkeepsie supposed to get back on its feet if companies that might be considering relocating there have to face such dramatically higher gas costs?

RVs On The Blocks (And In The Voting Booths)

In About Schmidt, Jack Nicholson memorably plays a retired mid-level executive who, after his wife’s unexpected death, takes an RV on the road and experiences various adventures — including a hot tub encounter with Kathy Bates.

I thought of the Schmidt character, and the many retirees who are part of the American RV community, when I went to fill the tank this morning and saw that gas prices were above $4 a gallon.  Even filling up my Acura cost just shy of $60.  How much would it cost to top off one of those enormous houses on wheels?  What kind of mileage do those behemoths get?  And if you were a senior living on a fixed income who hoped to spend your retirement touring the countryside and hanging out at KOAs and Good Sam campsites across the fruited plain, how would you feel about the rising gas prices that are making your retirement dreams so much more difficult to afford?

Of course, summer is the peak RV driving season.  Only time will tell how many RVs will be on the road this summer, and how many will be on blocks because of gas prices.  My guess is that any disappointed seniors who are foregoing their tours of America’s highways and byways due to rising gas prices aren’t going to be happy about it — and they are probably pretty likely to vote, too.

Gas, In The Heartland

Today I was on the road.  I had to gas up, and the station where I stopped was selling regular unleaded for $3.85 and premium unleaded for $4.15 a gallon.  Filling up cost me almost $60.  Ouch!  And I drive a pretty fuel-efficient sedan, not a truck, or van, or SUV.  In short, we are well past the fifty-buck fill-up and are rapidly moving into uncharted territory.  I don’t even want to think about what gas prices will be when the typically heavy driving summer months arrive.

I don’t sense that gas prices are really on the radar screen in Washington, D.C., and I find myself wondering whether that seeming lack of interest has a geographic basis.  Most East Coast cities have established, easily accessible, and often subsidized mass transit systems; they also have other qualities that discourage car use — like limited, hyper-expensive parking and constant gridlock.  As a result, Eastern city-dwellers don’t drive much.  When Kish and I lived in D.C. in the ’80s, we never drove anywhere.  It was too easy to take the Metro, or walk.  We could go weeks without filling up our one car.  As a result, gas prices didn’t make much of an impression on us.

In the Midwest, it’s different.  Outside of Chicago, few cities have any kind of meaningful mass transit.  A few green, economy-minded folks — like my friend The Conservative — take the bus, but most people don’t see that as a viable alternative.  (And I doubt that even the most green D.C. policymakers would take a city bus, either, if the Metro weren’t around.)  In the Midwest, the car is the primary mode of transportation, and because the cities are spread out, people tend to drive farther and need to fill up more frequently.  If you are someone who lives in one of the outer suburbs, or commutes from a neighboring town like Springfield, the impact of steadily increasing fuel prices is even more profound.

I think there is a reasonable chance that many bureaucrats and politicians simply don’t comprehend the true effect of $4 a gallon gas on those of us who live in the heartland.  They see gas prices as a kind of manipulable commodity that can be hiked up to encourage stubborn people to use mass transit or buy a new, more fuel-efficient car.  But in the depressed Midwest, often those aren’t realistic options.  We have to drive our current cars to get to work, and higher gas prices inflict real economic pain.  And, incidentally, when gas prices increase we need to cut our spending somewhere else — so if gas prices stay high, or get even higher, don’t look to us to engage in the kind of consumer spending that some are hoping will pull the economy out of the lingering recession.

The Fifty-Buck Fill-Up

Don’t look now, but gas prices in Ohio are spiking.  The cost for a gallon of unleaded regular has increased by more than 60 cents a gallon over the last three months.  This morning, with the gas gauge firmly on E, I stopped at the neighborhood Duke station for a fill-up.  To my chagrin, it cost $50.24 to top off the tank — and I had experienced the dreaded fifty-buck fill-up.

Gas prices are notoriously volatile.  Nevertheless, experts expect the prices to continue to rise, and rapidly.  The fact that prices are going through the roof during the dead of winter, traditionally a slow time for driving, is not a good sign.  The predictions are for $4 a gallon prices by spring, and even higher prices by the summer driving season.

The last thing our battered economy needs right now is a gasoline price spike.  People don’t budget for it, and if you are a commuter, as many Americans are, it is a cost you can’t avoid.  The money that consumers use to pay for most costly gasoline will not be spent on other goods and services and therefore won’t be used to create new jobs.  And the rising fuel costs will necessarily result in higher costs for goods delivered by truck — a category that includes everything from food to electronics — which means we may see an inflationary ripple effect in prices for a broad range of products.  This is not good news for an economy still trying to recover from a recession, or for a worker who took a faraway job because he needed to do so to feed his family.

 

A Spike At The Pump

In case you haven’t noticed, the price of gasoline has been spiking.  I’ve been doing a lot of driving lately for work, and the price hike has been noticeable.  Consistent with manufacturer’s instructions, I always feed my faithful Acura only premium gasoline, and the price of the high-test in Ohio has jumped to more than $3 a gallon.  It now typically costs me more than 40 bucks to fill up the tank.

The AAA fuel gauge report shows how prices have increased recently.  In the past year, the national average price for regular gas is up more than 80 cents a gallon, and the national average for premium is up more than 90 cents. 

This is not good news for an economy in the doldrums.  Higher gas prices mean higher transportation costs for shipment of goods by truck.  Such increased costs will mean that cautious, penny-pinching companies will have less money available to hire new employees.  People who commute to work will be spending more on that daily necessity; as a result, they won’t have excess cash to do the consumer spending that experts are counting on to really pull the economy out of the ditch.  High gas prices also may cause people to decide not to take that driving vacation this summer, which could further hurt the struggling travel and recreation sector of the economy.  This is not an exhaustive list; there obviously will be other negative ripple effects.

I’m not sure that I am seeing any real signs that the U.S. economy is pulling out of the recession, although some economists insist that process is underway.  Let’s hope they are right, and let’s hope that the higher prices at the pump don’t stop that process dead in its tracks.