Low gas prices are kind of like a $1 billion daily bailout
Photo by glenn.batuyong. Licensed under Creative Commons license 2.0.
Remember those $4 a gallon gas prices? They were costing America a lot, more than I realized. According to the chief oil analyst for Oil Price Information Service, Tom Kloza, today's lower gas prices are the equivalent of Americans saving a billion dollars a day on gas. While that certainly takes a bit of the bite out of people's energy budgets, there are other ways to look at what Kloza is saying. While the Detroit Free Press highlights the money saved in comparison to the $1.6 billion or so that Kloza estimates Americans were paying each day in July; some of us might prefer to note that we will pay $611.5 million for gas today. And we'll will do so again tomorrow. And we're not even using that much less gasoline than we were in the summer. What a way to ring in the new year.
[Source: Detroit Free Press via Blogging Stocks]
Reader Comments (Page 1 of 1)
gorr 9:42PM (12/31/2008)
Of that billion a day bailout, not a single chatter or blogger receive a 5$ sometime from the millions of peoples having save 100$ or more since the last 3 months. So all we wrote here since years have been in vain. Not a single chatter is recognize, not a single businessman is recognize, not a single politician is recognize, not a single car guy is recognize, LOL. We saved billions and billions of dollar and nobody is credited having decided it. The market is a unknown or what ?
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Rick 10:06PM (12/31/2008)
I'm not sure if this is what you mean gorr, but are you taking credit for low gas prices? you figure chatting and blogging had something to do with it?
Joe 1:32AM (1/01/2009)
Nobody understands what gorr is ever saying. It's always just Pro fuel cell anti everything else jibberish. The content of the actual post is often irrelevant.
gorr 10:17PM (12/31/2008)
Im sure world peace will be done cheaply in internet.
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dave 9:43AM (1/01/2009)
Yeah - and I'm sure Wendy's chili is better than a pair of nylons. I make just as much sense.
doug 11:17AM (1/01/2009)
It's only money saved if consumer maintain the habits they adopted to cope with the higher prices - driving slower, driving less, driving higher mileage vehicles. If we just resume pushing the pedal to the metal in our 14mpg SUVs, we won't save anything.
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aaron 8:51PM (1/02/2009)
Doug, unfortunately you're probably right. Problem is people actually picked up bad habits in response to the ridiculously high gas prices. Fuel efficiency has been going down, not up even as people drive less and buy more fuel efficient cars.
People mistake slow for efficient. Slower is only more efficient at freeway speeds. Above 55mph. Below 40mph, faster is more efficient. And accelerating quickly (but smoothly) is as efficient as (or more than) accelerating slowly. Typical car engines don't see efficiency drop off until around 3000rpm.
Then you have the congestion problem. Idling along to prepare for an expected stop is very efficient--for the individual. But when it interferes with traffic, preventing other queues from clearing, it causes more stop and go traffic. Very inefficient.
gorr 12:21PM (1/01/2009)
Rich said that chatting and blogging have something to do with what happen on the real market. He is right and it was what i meant. So be polite and do like me, the best idea after been written here goes all around the world in minutes and communist type of person critizise it and negate it because they feel afraid of anything, expecially a new idea because they live to take care of the pain, this is their only jobs, if their is no pain all the politicians and state employees and 90% of the population feel useless. But the new idea after a night or two of good sleeping is adopted because it don't leave the imaginary. So all i order as products here will be on the markets despite the economic world crisis of today. Gas prices did the same thing, it's been high-jack, promoted, legalised, studied, feared, talk about but finnally people have surrender to what i writed here and it's because of me that the price of gas to fuel your car is cheaper then in the recent past.
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gorr 12:53PM (1/01/2009)
Rick not rich, sorry for the mistake.
By the way how do we do to respond to a particular chatter in a tread? i tried but never find it. The left vertical bar ?
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Chris M 2:50PM (1/01/2009)
Click the "reply" button.
Chris M 2:54PM (1/01/2009)
Also, there is only one "level" of reply, so if you need to reply to a reply, you have to go back up to the original post and click the "reply" button on the first (shaded) post that the replier replied to.
Yes, I know that sounds confusing, but it isn't half as confusing as a typical Gorr post, so he should understand it perfectly.
me 1:52PM (1/01/2009)
I think you mean that the $4+ a gallon prices were a billion dollar a day drain on the economy, which helped us get in to this mess.
"Normal prices", when the economy was good, were around $1.60 to $1.90, not the $4.00+ of this last summer.
I don't consider current low prices a bailout. They sucked the life out of the economy for as long as they could and the gas price bubble popped.
Happy New Year!
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Sasparilla 4:26PM (1/01/2009)
All I can say is thank goodness the prices are where they are - we'd be in a whole bigger mess (financially) if we still had $4 + gasoline sucking the life/money out of the economy as we go through all this financial turmoil.
My personal view is that we'll get this temporary reprieve on prices till the world economy comes back, but we need these low prices right now, till we're out of the "could fall into a depression" danger zone.
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Carney 8:44AM (1/02/2009)
The problem is that these lower prices are not happening in the pre-collapse economy. If they had been, they would represent a significant savings and would indeed be an economic boost.
However, the lower prices are a result of drastically reduced demand due to drastically lower eonomic growth, job creation, movement, and activity, and (sound) expectations of continued low levels of them in the future. In a matter of a few months, literally TRILLIONS of wealth have been wiped out that will never be able to finance loans, constructions, expansions, hirings, start-ups, and so on. We're now in a much smaller, more constricted economy now and in the future, not just in the US but overseas in places like China and India.
Finally, OPEC is implementing drastic production cuts in an effort to jack prices back up again anyway, so this situation won't last.
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Josh L 10:04AM (1/02/2009)
Gorr how about spending $1 billion on English lessons.
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