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« Investing in Energy Innovation | Main | Global Oil Outlook: A Crude Reality »
May 28, 2008
How Are High Gas Prices Affecting You?
Record-high gas prices affect more than just the family vacation. As gas prices rise, so does stress on the job.
How high are gas prices? So high that thousands of pumps at mom-and-pop service stations can't even register the number on their spinning mechanical dials.
Last year at this time, the national average for regular unleaded was $2.86 per gallon. Now retail gas prices are up nearly 19 percent from year-ago levels, according to auto club AAA's national average. Prices are 61 cents higher than a year ago, according to a survey of stations by AAA and the Oil Price Information Service.
Last week, prices were already above $4 a gallon at many stations around the country, and averaged more than $4 in California, New York and Illinois, among other states.
"A national average approaching $4 a gallon should not be ruled out by consumers later this year," an AAA rep recently told CNN.com, saying Americans should expect the price to continue climbing over the summer months.
The price of gas at the pump has been supported by record high crude oil prices, which have doubled over the past year. Whatever the causes — global supply and demand, limited refineries, geopolitical disruptions, speculators, greed, et. al. — one of the most dizzying runs in the history of oil prices picked up pace last week (again) as crude oil prices jumped to settle at a new record of $135.09 a barrel.
Yet while gasoline prices in the United States continue to hit record highs, they are actually much lower than in many other countries. Of 155 countries recently surveyed by Air Inc., a company that tracks the cost of living around the world, U.S. gas prices were the 45th cheapest. As of late March, U.S. gas prices averaged $3.45 a gallon. That compares to over $8 a gallon across much of Europe. Earlier this year, drivers in some European countries, like the Netherlands, were paying nearly three times more than those in the U.S. (Note: Comparing gas prices across nations is always difficult. For one, the Air Inc. numbers don't take into account different salaries in different countries, or the different exchange rates.)
And if you think the price of gas hurts, try diesel.
No doubt, record gas prices near $4 a gallon kept some motorists from hitting the road this Memorial Day weekend. AAA has seen that when gas prices hit "exorbitant levels," Americans change their vacation plans, traveling closer to home, staying at less-expensive hotels and eating at fast-food restaurants rather than fancier dine-in restaurants. AAA expected 360,000 fewer Americans to venture from home this year over Memorial Day weekend. I suspect some IMT readers spent their three-day weekend taking a "staycation" rather than traveling to a far-flung location.
In a recent survey of more than 800 people this spring — when gas was about $3.50 per gallon — 52 percent of respondents had reconsidered taking vacations due to high gas prices.
Yet rising gas prices affect more than the family's budget for recreational activities. As gas prices rise, so does the stress.
"If you doubt the visibility of this issue among workers, eavesdrop on what they are talking about," Workforce Management recently suggested. "Rising [gas] costs are leading to increased rates of depression and increased commuting time as employees shift to public transportation, both of which decrease employee productivity."
Pump pangs create more employee stress and cause less attentiveness on the job, according to the aforementioned study, by Wayne Hochwarter, the Jim Moran Professor of Management at the Florida school's College of Business. Hochwarter's data came from a survey of full-time employees who work primarily in the southeastern U.S. and drive personal vehicles to work with an average commute of 15 miles each way.
According to the study's findings, announced this month:
- About one in three said they would quit their job for a comparable one nearer to home;
- Forty-five percent have cut back on debt payments, such as credit cards;
- Forty-five percent report escalating gas prices have "caused them to fall behind financially"; and
- Nearly 30 percent considered going without basics like food, clothing and medicine.
As such, survey respondents — from a wide range of occupations — said gas prices were foremost on their mind.
A factory worker who responded wrote, "I spend more time at work trying to figure out what I need to give up to keep gas in my tank than thinking about how to do my job."
"People concerned with the effects of gas prices were significantly less attentive on the job, less excited about going to work, less passionate and conscientious and more tense," Hochwarter said in a statement. "Employees were simply unable to detach themselves from the stress caused by escalating gas prices as they walked through the doors at work."
Are you feeling the pinch of high gas prices? Let us know how gas prices are affecting you and what you're doing to cope.
Earlier: Panic at the Pump
Resources
Old Gas Pumps Losing Numbers Game
The Associated Press (via The Chicago Tribune), May 13, 2008
$100 Fill-Ups Arrive at Gas Pumps
CNN, April 23, 2008
Who's to Blame for $4 Gas
by Steve Hargreaves
CNN, May 22, 2008
U.S. Gas: So Cheap It Hurts
by Steve Hargreaves
CNN, May 6, 2008
Gasoline Is Cheap
by Robert Bryce
Slate, May 15, 2008
FSU Researcher: As Gas Prices Climb, Employee Productivity Plummets
Florida State University, May 5, 2008
As Gas Prices Go Up, So Can Productivity
by John Sullivan
Workforce Management, May 2008
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Comment
13 CommentsFOREIGN WARS OR DOMESTIC OIL
If the US Government spent a trillion dollars over 8 years on domestic oil production from known reserves in the Gulf of Mexico, the Continental Shelf and coal gasification instead of War in Iraq gas would be $2 a gallon or less. America could quit sending billions to countries that sponsor terrorism. And reducing our trade imbalance keeps jobs in America. Every billion of trade deficit costs 13,000 jobs. $400 billion for oil last year: do the math.
America has 1/4th the coal on planet earth. South Africa is producing 300,000 barrels of gas and diesel a day from coal. And synthetic fuel from coal is cleaner burning than gas. And it can be produced cheaper than from $100+ a barrel crude oil.
Harness your anger at the pump. Call you're US Senators and demand domestic production in this decade. If you do not raise your voice the oil companies and politicians will assume you are ready to pay even more.
May 28, 2008 11:34 AMIt is an unfair comparison to say prices of gas in Europe are higher there-by implying we too should accept high price. NOT!!! I hear this excuse all the time. In reality, both Canada and the US are huge countries and distances between cities towns and villages are much greater here than in Europe. A small rise in the price has a far greater impact on your economy than it would in say Germany or Sweden. Here in Canada, the price is over $5 a gallon now and it's really hitting us hard in the pocketbook.
As I have said before, gas prices affect the cost of everything we buy and you too. Food as well. It has a big impact on inflation figures so that should tell you something. If gas goes much higher in price it WILL put a choke hold on the economy and people will suffer economic woe Warren Buffet is already predicting hard times ahead for the US.
Please visit http://www.nbtv.ca and take part in our gas price poll. Thanks. I hope my next post here is not so doom and gloom as this one was. I do however offer some solutions on my website.
May 28, 2008 1:32 PMAs a result of high gas prices, more and more people are signing up to RideSearch.com - a free nationwide rideshare-matching website.
May 28, 2008 7:35 PMMichael writes: "Harness your anger at the pump." I'm not sure how we would do that, exactly, short of a boycott. And it would take an awful large voting block to counter the voice of the petroleum industry in the ears of our representatives.
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It would not be the first time a civilization fell because vested interests would not allow it to adapt to change. Classical Rome fell, not as a result of moral depravity, but because 1) the "barbarians" learned Roman military strategy by serving in the Roman legions, and 2) the "barbarians" had iron working and steel making, while the Roman special interests kept Rome locked into the bronze age. When a steel broadsword strikes a bronze sword or shield, the bronze shatters.
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But, anyway, enough of the history lesson. To answer the questions... I live on disability, partly on SSI. Cries of "Get a job!" and other such "advice" is not something that I can really put into effect. Most people in my position cannot afford to keep a car (some cannot even afford a place to live). I do so with careful financial management, and by doing without extras such as eating out or going out to a movie theater. At current gasoline prices, I must restrict my driving to essentials, such as buying groceries. Since the cost of transporting goods is added to their prices, I may eventually have to junk my car, and obtain groceries, such as they are, at the local food banks. I'm not talking a lifestyle change, I'm talking about hovering at the edge of survival.
I have already purchased a scooter to cover my 50 mile round-trip per-day commuting. The savings in gas consumption will pay for the scooter in 8-10 months. I am spending $2-$4 at the pump in lieu of $50-$70. I am limiting my trips to one per year for 400-500 mile trips to see family, though.
I have picked up a part-time job for 3 afternoons a week on my route home for an employee discount on groceries, exercise and extra spending money. Vegetable and fruit gardening is saving money and helping me to achieve a healthier lifestyle.
The current hard times and uncertain future will no doubt cause further lifestyle adjustments, but for now, with resourceful adjustments, I am better off now than 2 years ago. I hope the rest of the hard-heads in America follow suit in the manner that best fits instead of crying about it.
May 29, 2008 8:06 AMAs a business owner in the construction industry, yes, we feel the "pinch" of fuel prices. (NINE company vehicles on the road, TWO are diesel!). We empathize with our employees' plight. We have heard of a couple local business owners who have given their employees fuel "bonuses" to help "cushion" the impact of the cost of getting to work. We have implemented a $60.00 per month per employee fuel "gift" for their personal use during the summer months. Hopefully, working together, we will all get through this tough time. Pulling together is the only answer.
May 29, 2008 12:25 PMHigh cost of gas has badly affected us and interfered with upkeep expenses. We have to use public means 21 days per month to be able to survive.
May 29, 2008 4:01 PMGas prices are not the only thing going up, food, untilities, phone, cable, propane, electric...someone is making money...
The only thing not going up are my wages.
July 2, 2008 1:57 PMWe have spent TWO generations building a society and economy on the
automobile & cheap energy. The age of cheap / unlimited energy is OVER.
This has been know by geologist etc for 50 + years.
Renewable or alternate energy.. will NOT / CAN NOT solve the problem. Go look up the second law of thermodynamics in any hi school physics book S = kLog W.
No process, biological, chemical or mechanical, can produce more energy that it consumes.
There are no free meals.
July 2, 2008 2:02 PMNo one likes to pay this much at the pump. It is nearly as much to fill the tank every 2 weeks as I used to pay for a new car payment in the 1970's.
Since I drive to work with my tools, there is no room to share a ride. The 25 miles a day only add up to 7,000 miles a year. The other 1,400 miles are spent helping others and doing errands, which mostly I do on the way home from work.
When I was married, the Mrs. would make multiple trips, one for butter, then another for bread, then a spice and that still goes on. Some people just cannot make a list and stick to it. That will not change with some. The joke about some vehicles just cannot pass a pump is true for some people and stores also.
The money I saved by combining trips have paid all my bills off. Just seems unfair to be tight with money and then hear on the news that a box of corn flakes for $4.95 actually only contain 15-cents worth or corn (that includes the cost to plant, harvest and transport), $1.30 per box for wages and the rest, $3.50 is middlemen and ad cost. Just who is taking the rest of us to the cleaners?
July 2, 2008 2:38 PMNow I have the time but not the fuel costs.
At some point in my working career, I must have known that when I retired I would volunteer to work with our teachers, students and schools. That time has come, and one of the very important things I do now is to talk to kids in their classrooms for a full period about the importance of staying in school. Those of us that do this are told by administrators in the schools that it DOES make a difference. However, we all drive our cars to those schools. It is getting very expensive. Mentoring is another thing done at a school on a different day. Teaching certain subjects in done at another different place. All these places are driven to with our private cars. Well, unfortunately food, medicines and taxes must be done first.
So that is how the high gas prices are affecting not only me but many children I cannot help.
July 2, 2008 2:56 PMHello
I bought a honda civic that runs on cng , 3.00 per gallon . The car get 30mpg . I don't know why more cng conversions are not being done old suv's . The engines run cleaner and seem to run longer . Maybe no one has engineered the complete conversions to utilize all the newest technology .
Ben
Let's get our Government to issue Federal Fuel Gas Cards. We spend billions abroad helping countries that hate us. Let's tax countries that trade with us and earn millions of USA dollars for their product dump the taxes into the Federal Fuel Gas Card. France seems to enjoy a lot,but when we need them they retreat. Let's boycott the products that countries import that don't support us in time of need.Let's drill for oil with safeguards in place for our land and wildlife. We build fighting equipment, missiles, and land on the moon, but we can't drill for oil?
