Ode to the Consumer

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Screen Shot 2016-01-20 at 10.45.39 PMWoe unto the world, now that oil prices have tanked.  If you watch Bloomberg, it is the end of the world as we know it.  Everyone is going to suffer because gas prices are so low, and big oil is in a snit.  Yes, people who are working the oil fields are losing their jobs, but please, put this into perspective.  In 2008, the price of gas went upward toward the $4.50/gallon range.  Last year it was close to $3.00+/gallon.  Today, in some places it is $1.29/gallon.  Where I live it is around $1.70/gallon.  That’s basically half of what it was a year ago.  In 1999 it was $1.29/gallon.

Do you grasp what this does for we the little people?  The average driver in the US, does about 13,000 miles a year or so.  Average US mileage per vehicle in the US is around 25.5 miles/gallon.  That’s approximately 510 gallons of gas per year.  When the price of gas is lower, people have more money to spend.  Last summer we were paying well over $2.oo/gallon where I live.

When gas is $3.00/gallon it costs about $60 to fill a 20 gallon gas tank.  When it is $1.70/gallon it costs $34 to fill a 20 gallon tank.  That means we the little people have an extra $26 in our pockets to spend on something else, or to pay a bill.  That pays for an extra movie, or an inexpensive dinner out, or steak instead of Hamburger Helper.  An extra $26 is going into the pocket of someone else, other than Big Oil.

This helps the consumer consume more.  The big question is will it cause prices on shipping to start falling. High shipping costs are strangling we the little people and we the little business people.  High gas prices kill school districts.  Imagine having gas prices half of what a school district has budgeted? There is a domino effect where we the little people start to get ahead.

There are some of us who think the reason the economy crashed in 2008 was due to the obscenely high price of gas.  When gas was $4.50/gallon it cost nearly $90 to fill a 20 gallon tank.  Today it costs an average of $34, and the price is starting to drop.  We should be paying less than that.  When you consider that 20% of that amount is federal and state taxes, it isn’t bad.

It may be bad for Big Oil and the Brother’s Koch, but it is great for we the little people.  The real problem here is that it appears no one is bothering to protect we the little consumer.  We the little consumer, the unimportant people of the world are getting screwed.  Big money is worried that gas/oil prices are continuing to go back down to what they should be.  Big money is worried because we the little people aren’t being screwed as badly as we were a couple years ago.  In fact, on Wednesday, the price of oil was the same as it was in 2003.  The average price per gallon then was about $1.40 or so.  Then, it only took $28 to fill a 20 gallon tank of gas.

Look at it this way.  If we drive enough to use an average of 510 gallons of gas per  year…

  • 2003 – $710/year for gas
  • 2008 – $2295/year for gas
  • 2016 – $867/year for gas

Get it?

When you are shelling out nearly $1500 a year to pay for gas, that does bad things to we the little people’s bottom line.  That $1500 is enough to cause a family to default on a house payment, for several months.  You default on  your house payment for several months and you lose your house.

Get it?

While we’re at it, let’s quite blaming George W. Bush for this fiasco.

 

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