Gas Prices

[kieefer]

[runco]

In 1984, I worked for minmum wage @ $3.35 hour. I remember gas spiking back then @ $1.24 gallon. It cost me 22 minutes of minimum wage labor for 1 gallon of gas, and my V8 Monte Carlo got 12 miles to the gallon, so that is 1.83 minutes of labor per mile driven. Today, minimum wage is $7.25 per hour, with gas @ $3.49 locally, I no longer work for minimum wage, but the group that does, has to work 28 minutes of labor for the same gallon of gas, +36% increase. Ouch! However, I will argue that the cost of travel today is cheaper than in 1984. There is not alot of late 70s or 80s V8 cars driven. Cars today are more like a 10+ year old Honda Accord or Toyota Camry which gets 32 miles per gallon. So to make a comparison to 1984 vs 2012, that is 0.875 minutes of minimum wage labor per mile driven, a whopping 52% drop.

So I submit, that the cost per mile traveled today as measured in minutes per minimum wage of labor plus factoring in car technology improvements, is a whole lot less. We as a society have got caught up in the efficiency gains and spent our new disposable income foolishly kinda like our government has. So any negative deviation of gas prices hurt, however our pain really isn't different from other generations just 25-30 years ago. Bottom line, it really is our government's fault based upon its overspending or in other words uncontrolled borrowing. This borrowing without real money being injected from a 3rd party really drives down the value of the USD. Other than political hype from the mid east from time to time, the Supply & Demand principal is all that drives gas prices, and as long as the West cars become more fuel efficient, it will drive down global oil demand, however, due to our obsession of lower prices which drove jobs to China and India, and now those nations are expericing a middle class that wants to drive, so they are changing from walking and bicycling to driving and with those huge populations will drive up oil demand, but I will argue one softening demand off sets the increase in demand. Therefore there really is no change in supply and demand. Until the US money policy is fixed or technology intervenes, drill drill drill will never really have an impact since oil is sold on the global market and will always be sold/purchased at global market prices. Supply and demand has to change on a global scale. People like you and me can't do nothing other than manage our money correctly, and plan accordingly. Don't spend your disposible income foolishly, save, save, save.

[RobertNashville]

In 1984, I worked for minmum wage @ $3.35 hour. I remember gas spiking back then @ $1.24 gallon. It cost me 22 minutes of minimum wage labor for 1 gallon of gas, and my V8 Monte Carlo got 12 miles to the gallon, so that is 1.83 minutes of labor per mile driven. Today, minimum wage is $7.25 per hour, with gas @ $3.49 locally, I no longer work for minimum wage, but the group that does, has to work 28 minutes of labor for the same gallon of gas, +36% increase. Ouch! However, I will argue that the cost of travel today is cheaper than in 1984. There is not alot of late 70s or 80s V8 cars driven. Cars today are more like a 10+ year old Honda Accord or Toyota Camry which gets 32 miles per gallon. So to make a comparison to 1984 vs 2012, that is 0.875 minutes of minimum wage labor per mile driven, a whopping 52% drop.

So I submit, that the cost per mile traveled today as measured in minutes per minimum wage of labor plus factoring in car technology improvements, is a whole lot less. We as a society have got caught up in the efficiency gains and spent our new disposable income foolishly kinda like our government has. So any negative deviation of gas prices hurt, however our pain really isn't different from other generations just 25-30 years ago. Bottom line, it really is our government's fault based upon its overspending or in other words uncontrolled borrowing. This borrowing without real money being injected from a 3rd party really drives down the value of the USD. Other than political hype from the mid east from time to time, the Supply & Demand principal is all that drives gas prices, and as long as the West cars become more fuel efficient, it will drive down global oil demand, however, due to our obsession of lower prices which drove jobs to China and India, and now those nations are expericing a middle class that wants to drive, so they are changing from walking and bicycling to driving and with those huge populations will drive up oil demand, but I will argue one softening demand off sets the increase in demand. Therefore there really is no change in supply and demand. Until the US money policy is fixed or technology intervenes, drill drill drill will never really have an impact since oil is sold on the global market and will always be sold/purchased at global market prices. Supply and demand has to change on a global scale. People like you and me can't do nothing other than manage our money correctly, and plan accordingly. Don't spend your disposible income foolishly, save, save, save.

Good points; but I don't think it's going to help anyone feel better about $5/gallon gasoline.

[Guest Lester Weevils]

Wonder is there is a way to find out the true impact of tax on gasoline prices? It ought to be simple, but perhaps it is not so simple?

http://en.wikipedia....e_United_States

This article lists the total fed + state tax for TN at 39.8 cents per gallon. Five dollar gas in TN would still be Four-sixty gas if all taxes were repealed.

The reason I'm wondering if it is really that simple-- This may be an irrelevant comparison, or maybe not--

http://en.wikipedia....e_United_States

The article lists totat fed + TN state tax at $1.63 per pack of cigs. I believe ordinary sales tax is added on-top. Other tobacco products and paraphenalia such as papers and filter tubes are also taxed (at lower rates than cigarettes) according to the article, but doesn't list the amounts and I'm too lazy to find out.

Just a "seat of the pants" observation-- A carton of name brand cigs in TN seems to go for about $50. Which presumably is $16.30 cig tax plus in the ballpark of 10 percent sales tax. A carton's worth of filter tubes is less than $3. If a pound bag of tobacco happens to have "cigarette" printed anywhere on the bag, it it at least twice as expensive as a pound bag of tobacco that does not have "cigarette" printed on the bag, though many tobaccos not labelled "cigarette" will work fine in cigs.

Just sayin-- seat of the pants-- It looks like currently if a feller buys not-awful non-cigarette-labeled bulk tobacco and stuffs filter tubes, he gets pretty tolerable cigarettes for what looks like about $5 per carton. Maybe a little more or less, but $5 per carton isn't way off the mark.

Slightly comparing apples-to-oranges, but if tobacco tax were repealed we might expect maybe a carton of pre-made cigs to drop to a little over $30? But roll yer own products which are not tax-free, but taxed a lower rate, are vastly lower even with the tax, in the ballpark of $5 per carton.

So I dunno, the cig/tobacco tax is really high, but there seems something else going on as well.

I just wonder if it is the same with gas-- The tax might influence the price a lot more than what we see on the pump?

If that makes any sense at all.

[Oh Shoot]

O'Reilly went on pretty good spiel today about how most of it is that US companies are selling more US refined fuel abroad than ever before, while raising prices at the pump at the same time.

This article agrees, citing an AP article from Dec.

http://columbianewsa...12/01/03/14976/

I believe he claims we are also selling more US produced crude.

It's ironic that the gummit "controls" oil production to a great extent in the US, but doesn't control where it or its refined products are sold.

- OS

Edited February 21, 2012 by OhShoot

[strickj]

There was an interesting article the other day about gas consumption "tanking".

http://www.oftwominds.com/blogfeb12/gasoline-tanking02-12.html

Now, someone explain to me again how gas prices rise when demand increases...

___________________________

Lester, I'd opine that repealing gas taxes would only affect gas prices very little. I'd be afraid that the only thing it would affect is Oil's profit margin.

IMO, it's all in the speculation of oil. I find it absurd the we allow the speculation of oil as it's only rhyme and reason is to increase gas prices.

You can't even profit from real estate investments (in the same manner of buying and reselling for profit) unless you sit on the real property for a few years or "flip" it. But with oil, you simply buy it today and resale it tomorrow to another speculator. God knows how many times a barrel of oil is purchased and resold before it ever reaches the end.