Dear Everybody, Quit whining about the gas.

From a personal perspective, I'll agree with you. From a business perspective, I won't.

I have three delivery trucks, two delivery vans, and a minivan. We try to use the smallest vehicle possible for a delivery so as to be more gas efficient. We also try to consolidate loads as much as possible to save on actual trips made. I believe we are fairly efficient at this. That said, delivery trucks are not fuel efficient and probably won't ever be. Delivery is a crucial aspect of our business. We can't just not offer it. We have started charging to offset our costs...but every gas increase, no matter how small, impacts our bottom line. It's hard enough to reach break even these days as it is...and I'll do all sorts of things to reach that point without laying anyone off.

I guess my take on it is that we do need to be more fuel efficient overall...and that it could be worse, but also that it's not all about being able to drive our Humvees for cheap. You know ?

From a personal perspective, I'll agree with you. From a business perspective, I won't.

I agree with you on this matter, and I feel for people whose businesses depend a lot on delivery or on goods shipped from, say, across the country or globe (practically everybody these days). When I said "ordinary citizens" above, I really meant "people with respect to their own cars". We all work for, sell to or buy from businesses that ship and deliver, and it will all impact us to a certain degree, and that's a separate, worthy issue.

Indeed it does impact us all. Just in my business, for instance, everything is shipped either from factories (usually in the deep south) or more commonly these days from shipping ports, typcially Houston, New Orleans (well, not now), Long Beach, CA, and Newark, NJ. No matter where you are, the transport costs are increasing. For instance, three years ago, my average freight rate was approximately 10% of the item's price to ship. Two years ago it was approaching 12%. Last year it was approaching 14%. I suspect it will be at least 16-18% this year. Since I can't afford to just eat those costs, they get passed on.

I imagine it's the same with most retailers of every sort. Increased transportation costs just mean that everything is higher priced. In the last few years, it has paced with inflation/cost of living increases. I suspect that this year it might be a bit more.

I agree, but I think there is going to be a significant ripple effect even beyond what you outline.

I'm not complaining about gas. I am profoundly lucky to live walking/biking distance to work. I am lucky that I can bike to the downtown where I live and to the next town over. That mrcozy will be able to bike to work soon and takes public transport to the current job. I can live without using a car except when I need to carry bulky or heavy items.

I am cheap. I have completely cut discretionary driving where possible. I think twice about going places that are "far" and far just became a whole lot closer. It used to be that I would laugh at my friend who won't consider driving to San Jose because it - at about 12 miles away - is too far. Today I found myself considering whether to drop my gym membership because I can run in my neighborhood and I'm not sure it is worth it to bike to the gym; driving across town - literally 3 or 4 miles - seems too decadent to consider.

I think the emotional toll of higher gas prices will impact the economy in a huge way as people start restricting their travel and by extension restricting their spending. Sadly, as alyoung points out, it probably won't increase savings as people spend their money on gas instead of luxuries. Even for people for whom it isnt *actually* a lot of money, it will seem like a lot of money.

Well, I'll still gripe about it. :) I drive very little but the increases still take a chunk out of my budget. Yes, I could take PT to work, but if I did it would literally add an hour to my commute each way, because the train lines don't go near my work and the buses around here, well, suck.

I'm also not going to ride a bike in the city. I've tried it a few times, and in the park, great! To work? No way. I'm a big pussy and I've seen too many people go down in traffic. So, I can't give up those two hours. To me, even with the increased cost in gas, my time is worth more.

Still, to put things in perspective, I just returned from England, where gas was ~6.50/gal. and it cost Kristyna and I over $100 to fill the tank on our very fuel efficient Nissan rental. Could be *far* worse here...

-Dave!

$111/month is a huge amount of money for many people. Consider the bloke driving the same cheap used truck he bought a decade ago, insured for liability only, barely able to pay his rent and food every month and still have a bit left over to see some movies and buy some beer. That's most people. Most people don't save; ergo, higher gas prices translates directly into less beer.

(Also, note $111/month with 6% avg interest equates to $20,000 after ten years.)

Only part of the equation...

Higher oil prices translate into higher prices all the way down the line, starting immediately with gasoline, and moving into the cost of fuel to produce electricity (much of the electricity in the U.S. is produces with a petroleum product) to heating in the Northeast U.S. where heating oil is still widely used to heat homes.

Add to that an increase in production and transportation costs for agricultural products (not to mention the loss ports in the Gulf of Mexico due to Katrina), and the cost of petroleum products for basic manufacturing (well, what's left manufacturing in the U.S.) I'd say that increased personal transportation costs are only a small portion of the financial hit which which most people will have to deal.

Essentially, in todays world the energy market is the only market that matters. It seems to me that nearly any other market deficiency could be overcome with an excess in the energy market. Poor soil can be compensated for, inpotable water can be cleaned, transportation costs could be overcome...all other markets are in some way dependent on the energy market.

Not to argue with the benefits of biking. It just seems to me that the transportation costs are only the beginning.

As someone who is adjusting to a budget where $111/month is indeed a big deal, I have to disagree with much of your sentiment.

We've had this discussion before. It's nice that the situation isn't costing you much, but look outside your sphere. Consider the impact on a two-worker family where both must commute 30 miles each way to work, and have cars which get 16 mpg. Toss a few kids into the mix, and the usual costs of living, and that increase in cost is substantial with any income. Few people could turn around and bike 30 miles each way TOMORROW, and often you can't find carpool options, either due to schedules and expectations at work.

The ordinary citizen has cause for concern, for the impact isn't only to be seen in their visits to the gas pump. For most people, everything they obtain for their day to day living, from produce to clothing, comes to them via the road. The increase in costs seen by those moving over the road for a living are very real and will impact the cost of goods in a ripple effect for months to come. While this effects the end consumer, it may well decimate some businesses who rely upon moving goods from point A to point B.

The increase we are seeing in gas costs are unlikely to be a real increase due to increased cost on the production end. Rather, it's a price increase based on emotion alone, one that will benefit the pockets of those who need it least at the cost of those who are much less prepared to handle it. And why? If it were a "real," market driven reaction I would not have much to quibble with. However, it seems just another form of looting, done this time by men in suits in boardrooms.

While it does all come down to supply and demand in a true capitalist economy, that is not what we have, nor have we had one for a long time. Subsidies, commingling of politics and commerce, etc. all pollute the situation.

I doubt the price of gas will return to mid-summer levels in a month. When it goes back down, it won't go down to pre-boost levels. Again, the cost isn't seen just at the pump. The companies who have instituted another, or larger, "fuel surcharge" will not drop that surcharge when the costs go down. I speak from experience -- shippers, distributors, etc. have done this to us for years.

As for hybrids, when I consider the purchase of a hybrid, I have no doubt that it would not pay off for me as an individual over the life of the car. However, looking at the larger picture, the more people who support alternatives, the stronger those movements grow. The more likely that there WILL be a day when there is an option available that WILL save people money, right out of the box. Without support now, it'll never get there.

I'm just thankful that we are now a one-car family, and we both work from home for the time being. Most of our gas consumption is discretionary.

I still pay the same price for a subway pass, so the whole idea of gas price is pretty alien to me. But I remember the days of sub-dollar gas, so when I do travel and see it high, it does tend to freak me out a bit.

The other hybrid advantage is that depending on your state (but probably not Indiana) you might get a significant tax break for buying it. In my mind, that's about the only advantage. In three or four years, there will be a huge hybrid backlash, when everybody's batteries die and they find out they have to pull out a few grand to get them replaced. They're also somewhat mum on the fact that batteries don't work as well in climates where it dips below zero in the winter. One of the reasons the GM EV1 was only marketed in Southern California wasn't just the trendy user base and the strict emissions laws there; it was also because those cars would have been immobile three months of the year in Minnesota.

I agree about biking, but I'm not as evangelical about it. But there are a lot of things people could do without their cars. I mean, why load up the car and burn $40 of gas to drag the kids to a soccer game and enjoy the outdoors? Why not make them walk to a field closer to home and play? And maybe walk there with them, and spend an hour or two away from the plasma screen TV?

As far as ordinary citizens go, for the poor who have to commute to work, this is a much bigger deal. Plus as dividedbyzero and alyoung point out, the financial impact effects more than just drivers, as costs of nearly everything goes up (if it has to be shipped anywhere).


But that said, Americans are total whiners about gas prices, and always have been. You can't get gas for less than $5-6/gallon anywhere in Europe. In fact no where other than oil-producing countries really. Check the global prices here
Wow, $0.12/gallon in Venezuela! Guess we'll be invading there soon too :)

If you buy the "peak oil" theorists, we'll all be paying MUCH more ($10/gallon some predict) in the next few years perhaps anyway, so $3 will seem cheap.

-beb