So, $3.50 per gallon is the breaking point for America?

[ZacFields]

http://money.cnn.com/2008/03/19/news/ec ... /index.htm (http://money.cnn.com/2008/03/19/news/economy/cnn_poll_gasoline/index.htm)

The Problem

In a recent survey done by CNN.com, about 69% of respondents said that the high gas prices are causing them to drive less. Over 75% of respondents indicated that the high gas prices were causing them some level of financial hardship.

Some analysts believe we are finally seeing a "breaking point" for how much the average American is willing to pay for gas. Gas demand is still rising, but it is rising much slower than it ever has. Finally, at $3.50 per gallon, Americans are starting to voice out that they are unhappy with how quickly gas prices have been rising.

Why shouldn't you be upset? Five years ago, we were paying $1.30 per gallon. With the rise in prices since then, we may be paying three times that much very shortly! You ought to be downright steamed! Inflation runs between 3-4% these days, and gas prices have consistently risen much faster than inflation.

Hopefully, relief is on the way. According to the CNN article, gas supply is at a 15-year high due to decreasing demand. Just don't hold your breath that OPEC won't decrease production to follow suit.

Message to OPEC

"Do not lower your production!" OPEC is loving the fact that they're able to sell their oil at $105/barrel, but these prices are also stimulating a growing alternative energy industry in America. The higher gas prices get, the more money investors are going to pump into these stocks. If OPEC valued longevity of their success, they would increase production, thus increasing supply, effectively lowering their prices. If they continue doing what they're doing, it will only cause countries to search for any way to decrease dependence on their product.

Look at America and our sudden infatuation with Ethanol fuels. Effectively, Ethanol saves the consumer very little money --if any at all-- but we love Ethanol because we hate OPEC and we want to support our own economy.

What will happen to most of the OPEC countries if the world finds other ways to power their vehicles? They'll go back to being the desert... and that's it.

According to the CNN article, the majority of Americans in their survey suggested they would stop driving all together if gas were to hit $8/gallon.
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What do you guys think? Have you consciously made an effort to drive less? Are you driving the same amount, but cutting corners in other ways?

I don't think it's possible for me to drive much less than I already do. I mainly only drive to work and home, and to places when I'm running errands. The high gas prices mainly mean that I have to send $30 or $40 less per month to my savings. I don't think it will ever make be "broke," because I manage my money well, but even if it's taking away money that I could send to savings, that's still a big problem for me.

I still stick to my claim that Americans will not accept gas being $5/gallon or greater for a very long time. I believe our breaking point is $3.50/gallon, and I believe demand will actually start to decline if gas were to cross $4.00/gallon. We just won't accept those prices, IMO.

[ZEE]

Haven't changed my driving habits at all. Just costs more. If the stupid government would let us drill in Alaska that would help a lot.

[TbTalon94]

I try to not drive as much as I can, but it's hard when you have a lot of stuff going on. Just try to keep all your vehicles the most fuel efficient as they can be and drive easier will help not consume so much gas.

Gas prices are stupid high and I don't see America putting up with much more, atleast I hope we don't. I know gas prices in Cali and other high-demand states are in the $4 range. I just don't see how people can WATCH oil companies make profit in the trillions and not complain about how rediculous the prices are.

[Stutz]

When the demand for gas is high they jack up the price, when the demand is low they jack up the price! Once my lease on my apartment is over im moving about 2 blocks from work and walking

[slobalt]

Hard to drive any less than I already do. It does make me rethink the distance from work. To late for that now. My choices are getting something that gets better than 27mpgs. I had someone suggest I could retune the car for better mpgs too. It may be cheaper than buying another car.

[ZacFields]

That sounds a lot like me Slobalt, except I actually live really close to work. On top of that, Ashley and I now work at the same place and we drive the same car to work. Before, she'd be driving her car one way to work, and I'd be driving mine the other way. So we're probably using at least 40% less gas than before considering the commute to/from work accounted for most of our driving.

In my budget, I have $160/month slated for gas, which would be $1,910 per year (an AMAZINGLY low number for most people) and so far this month we've only used $74 of it, so I think I can probably lower that number to about $120 for future months, especially with summer coming on we'll be riding my motorcycle to work a lot.

There's nothing wrong with not altering your driving habits if you can afford it. Any way you slice it, you're probably losing $100+ per month if you haven't changed your habits at all. For me, that's a lot of money. It may not be a lot for some other people. I'd rather take that $100 per month and invest it though.

[mimosa]

I wish I didnt have to drive anywhere.
I went and traded in my suv for a car that uses more gas :mad:

[96-eclipse-gst]

I have started to notice, I drive more like my dad. Who baby's all of his vehicles. My dad calls it "growing up." We all know the truth, Why race from stop light to stop light. I just enjoy the drive to work, and enjoy the drive home. I love my car, and I love how it feels when getting on it, but with gas prices the way they are. There is just no point in spirited driving. I have a feeling this summer I'll be driving more like a grandma and grandpa. Slow and steady.

[ZacFields]

That'll also make your car last longer andrew :)

That's the biggest thing that sucks for me about the gas prices being so high: I wasn't abusing the low gas prices! I have always tried to drive as little as possible. I'm not like most people driving out to Iowa City every weekend to go bar hopping (which is a double-whammy financially), and I have never done a lot of driving that was unnecessary except when I was 16-18 years old.

Now gas prices are higher, and it just sucks because there's so little I can do to use less gas than I already do.

[Domestic Disturbance]

It's not really affecting me right now without my car running, but its scary to look at. I love driving my car, anywhere and everywhere I can, and I'm not a rich man. Makes me reconsider some mod's I want to get done to the car, and get a bike.

[Drifte]

I work very closely with all of Iowas energy conservation people, and utilities. The problem is the government cooperation for the most part.

I have been using more gas than usual lately (and premium at that) driving home occasionally. Once it warms up a little more I can park the car entirely. I work at UNI, and go to school their. It will be great just walking or biking and seeing my money stay MINE.

[biohazard]

I guess for me it's nice that I don't live too far from where I work so when it warms up, I can ride my bike to work to save cash for gas.

[ZacFields]

Yeah, you mentioned wanting a bike. That's the only positive of this whole thing is that bikes are just about worth their weight in gold right now. Value depreciation has slowed down a lot on bikes and small cars these last few years.

When I bought my 2007 Suzuki M50, I saw a 2005 Suzuki M50 in the gazette selling for only $800 less. It also had around 8,000 miles on it. I was amazed that after 8,000 miles and 2 years, it's realistic to sell that bike for just $800 less than a brand new one.

[Drifte]

im talking bicycle. veeeeeeeeery cheap.

[ZacFields]

lol no I was referring to DomesticDisturbance saying the prices make him want a bike.

[Domestic Disturbance]

zx6r or r6... I'd be in heaven

[TbTalon94]

colton don't run premium? What are you thinking. Just run 89 octane and don't boost. That's all I do and it gets by JUST fine.

[Drifte]

^ you are suck a lier. I just take my car apart and dont drive it.

wait you dd a JIMMY! I guess you werent lying. you dont boost and do run 89...in the jimmy.

[TbTalon94]

No i actually run 89 octane all the time..Like when we were all racing around, yea that was me with 89 Octane. 15psi and 89 octane. If you don't believe me come to town and i will go to the gas station and fill up with 89 octane then go make a run, if i can ever get the fucking thing to start that is.

[JustinS]

Haven't changed my driving habits at all. Just costs more. If the stupid government would let us drill in Alaska that would help a lot.
Same with North Dakota.

I wish I could drive less, but living in Ames and working in Des Moines pretty much dictates a high fuel budget. The bike will cut that cost down a lot this summer though.

[AllAmericanMuscleChick]

We've pretty much stopped going places unless necessary... I quit my job because driving across town and back twice a day to take Landon to daycare was killing us. It was in all actuallity costing us money for me to work... makes sense huh??

[DustinsDuster]

theres more than a few bars close to where you two live now...not saying that they would be the greatest jobs, but you can make some pretty decent cash as a waitress or bartender. if you can stand it that is...

[tylers88]

Did anyone see that guy from California on the news, he was the only gas station for a 40 mile radius so he was charging over $5.00 a gallon. When they asked him why he said,"Because I can," so after that making a national headline I seriously doubt that if will ever reach that much and stay for long. I have cut down my driving ALOT I use to put almost 1200 miles a month on my pickup now I'm lucky to put 500 miles a month on it.

[Ricky]

i dont change my driving habits so i dont complain. Yeah it sucks but i put 13,000 miles on my car in 5 months. i do have a bike that i have been ridding a lot more now that its warmer and im getting about 40 to 45 mpg.

[96-eclipse-gst]

Gees Eric, I hardly put any miles on my car. You need to stop driving so much.

[Jappbox]

You guys are funny, I drive at least 1 hour for work 1 way each day.. Sometimes we work 4 hours away. (stay over night) sometimes we do work real close within 30miles. Right now we are spending $200 a WEEK on gas in 1 Van. $800 a month in gas is crazy costs right at $90 to fill. We just have to add in the costs of the gas prices to the job. Thats why EVERYTHING is higher not just gas.

[Ricky]

Gees Eric, I hardly put any miles on my car. You need to stop driving so much.

just about to roll over 20,000 here soon

[DustinsDuster]

You guys are funny, I drive at least 1 hour for work 1 way each day.. Sometimes we work 4 hours away. (stay over night) sometimes we do work real close within 30miles. Right now we are spending $200 a WEEK on gas in 1 Van. $800 a month in gas is crazy costs right at $90 to fill. We just have to add in the costs of the gas prices to the job. Thats why EVERYTHING is higher not just gas.

yeah, i have to fill the truck i drive for work about once or twice a week. they tell me to fill it at half tank, but even then it's like $175 to fill. diesel is expensive...

[TbTalon94]

Soooo premium is 3.45, breaking point of 3.50? My ass.

[DustinsDuster]

honestly, i think the breaking point would be closer to $5-$5.50 in all honesty. even then, i bet 80-90% of people will still drive, just complain about it even more.

by the way, Diesel is 3.99 right now...

[belittle]

Diesel prices are nearing 5.00 a gallon is Cali.

Experts are predicting another 50 cents increase or more over the summer as the dollar weakens and summer travel starts.

I don't know about anyone else but I'm streching as much out of my tanks as I can. I think I'm going to start synoning out the gas in my parts cars.

Race gas isn't looking to bad now @ 5 dollars a gallon.

[TbTalon94]

no shit, race gas is like a dollar more then premium. Fuck bush

[ZacFields]

Trev Trev Trev, politics has nothing to do with this. Don't be so blind.

There will be a new president in about 7 or 8 months, and you will all see that the gas prices have got nothing to do with politics. The only effective solution that a president can provide would be more funding for alternative energy research, which by the way is a solution which will take probably a decade to become really effective.

If you're one of those people that think that suspending the filling of our oil reserves, or even opening up our oil reserves is the answer, you're mistaken. Economists have already suggested that that solution isn't going to fix anything. Essentially all it would be is a "nice gesture."

I hate these high gas prices, but honestly I am prepared to pay them. I believe this is the only way that Americans are going to learn. We are so addicted to driving in this country it is nuts. I see way too few motorcycles and scooters around here, way too few compact cars. FAR too few hybrid vehicles.

$3.50 really is the breaking point for America. Shit, Pat McGrath is selling 2008 trucks for $13,000 right now. Go check it out. There has been a widespread motion towards trading in the trucks and SUVs for cars and hybrids. Bring on $4.00 gas for all I care, that will only further sweeten the pot. $5.00 gas within the next 3 years and you will see almost a complete disappearance of the Truck/SUV population, if only temporary.

Bottom line is that these crude oil prices are unsustainable. They are based on pure speculation and they will go down, but it will only be when we finally decide as a country to be more economical.

If you want a kink in this magical plan, look no further than India's car manufacturor "TaTa." They make a $2,800 car, and all those hundreds of millions of Indians will be driving the little shits pretty soon. We can become more economical, but realistically we just need to get out of crude oil all together. The Indians are going to mess up any efforts we make to decrease demand.

[TbTalon94]

Go look at the gas prices in other countries.

I know much more about the government then you mak think Zac. We would have to sit down and talk for a few hours and i'd fill you in on what I know. Gurantee some things you'd be shitting bricks. That's all there is to it. The government has the ability to do anything they want, honestly. They could end the high gas prices...but why? It makes a lot of people so much money. That's all it's about, money and power. Hasn't hollywood taught you anything lol?

[Ashley]

You know that the US is like not even in the top 100 as far as expensive gas, right? Other countries have it 100x worse than us as far as gas.

[ZacFields]

Really Trev? Okay I'll play your little game on this. Fortunately for you, while I couldn't give a shit less about politics, I know a ton about the economy.

First I'm going to tell you that you're about 95% wrong. A huge reason that gas prices are so high right now is because of the falling US dollar in comparison to other countries. The reason the $USD is falling is largely because the Fed, trying to ward off a recession, has been dropping interest rates for about 6 months now. The lower our interest rate is, the further our dollar will fall. It's as simple as that. Crude oil is an import, so since our dollar is not worth as much to other countries, we have to pay more money for things that we import. This is a big reason why Toyota is hiking up the prices of their vehicles soon.

You told me to go check the gas prices in other countries. Luckily for you, I did that about a week ago. Did you know that the gas prices in our country are painstakingly cheap compared to other countries? Europe, who supposedly is the greatest place in the world, largely has gas prices that are TWICE what our gas prices are. At a national average of $3.45, we're ranked 108th on the list of highest priced gas countries. That means there are 107 other countries in the world where gas is more expensive. Here is that resource for you:

http://money.cnn.com/2008/05/01/news/in ... /index.htm (http://money.cnn.com/2008/05/01/news/international/usgas_price/index.htm)

On the other end of the scale, all of the cheapest countries for gas are countries where oil is a primary export. Thus, they don't have to deal with the cost of importing oil. On that scale, the United States is the 44th lowest priced oil country.

I'm going to tell you right now, to save you from a lot of heartache Trevor. Go and vote for Obama or Hillary or whoever you'd like, because it honestly doesn't matter. The world isn't suddenly going to get better when there's a different person in the office. Things will change, sure, but you're not going to see $1.25 gas prices and free health care for all anytime soon... if ever. For everything "good" there is always a catch. The world is what it is. Oh there are lots of things that will get better, I'm sure. But 90% of it won't affect the average person.

Finance and the economy is mostly what I study in college. These are things that I know.

[ZacFields]

You know that the US is like not even in the top 100 as far as expensive gas, right? Other countries have it 100x worse than us as far as gas.

Exactly. Go to Europe and try to find more than 10 SUV's on the road in one day. Gas is so expensive there that they are forced to drive tiny cars.

By comparison, our gas is STILL dirt cheap. We just haven't adapted like Europe has to things like carpooling, mopeds, bikes, etc. It's easier for them because they are used to it by now.

The funny thing about it is that Europe's gas, while still more expensive than hours, is made worse because their gas is taxed much more heavily than ours is.

I just think it's hilarious when people try to say that there's something our president or congress can do to bring back $1.50 gas. People act like the gas price is actually set by congress.

Bottom line is this: There are two ways to fix the high gas prices.

1. Increase supply (on our own soil)
2. Lower demand.

Basic fundamental rule of economics. "Supply and Demand." That is what sets these prices, no matter what conspiracy theorists say. Trust me folks, there is NO conspiracy. I promise you the price of a barrel of crude oil is NOT set by the United States in any way, shape or form. The government can do only a few things:

1. Lower the gas tax. Will save you maybe 10-15 cents per gallon, but will increase demand.
2. Increase US drilling. Increases supply.
3. Build more refineries. Increases supply.
4. Raise the gas tax. makes gas more expensive, but will further reduce demand. Tax can go toward exploration of alternative energies.
5. Stop filling the reserves. Increases supply, but again will save you maybe 30 cents on your next fillup.

I guess I'm not sure what's so hard to understand about the fact that the government power on this issue is very limited. The oil is NOT our resource. We make very little of it on our own. Thus we have very little control over its' prices.

Furthermore, there are bills floating around our house and senate all the time. My challenge to anyone on these boards is to find a bill started by a democrat or a republican, that discusses anything outside of those 5 things I just mentioned. Then further, find me one that passes through the house and the senate (the two places all bills MUST pass through) that the president is vetoing. If this is some big conspiracy, I guess everyone in the house, senate, and white house is in on it.

[TbTalon94]

Woah woah your attacking me a lil bit here. I completely understand everything you just typed. And i wasn't saying that the US is #1 highest gas prices. I realize other countries have higher gas prices. I also understand Supply and Demand very well.

I wasn't saying you were wrong. I also wasn't criticizing Bush just for gas prices....

Politically I'm un-decided. I'm pretty much that person in the middle (forgot what it's called). So politics don't really rank high with me when it comes to points of interest.

What i was TRYING to say is that there are a lot of behind the scene's things going on that you and i gurantee 99.9% of this board is not aware of. I could go into detail ALL day long and give evidence about these things. Things from goverment conspiracies to the Vadican. The government controls a lot more then people think. It's just all behind the scenes. You really have to dig and you have to dig in the right places to find the stuff out I know of.

That being said, i completely agree with you Zac that Bush nor the congress has the ability to say "gas prices are $1.75 from now on". People who blame Bush soley for the high prices are just ignorant. I said fuck bush, because there are things about him i do not like.

[ZacFields]

Sorry for attacking you Trevor. Your post just made it seem like I didn't know what I was talking about, and that seemed insulting to me since these are the types of things I study in college. I'm in college for finance, but that includes my economics courses, and the fact that economics is part of almost every class I take.

Real quickly, I do understand about the "behind the scenes" things. The best place to see that stuff is all the pork barrell spending going on in congress. Someone is trying to pass a bill concerning health care, but amidst the issue itself, guys in congress keep tagging on extra stuff. Maybe extra money so their state can build an amusement park. Could be a pay raise for some of their buddies back home. They sneak these things into the bill hoping to gain approval.

I'm not so blind to say that a new president wouldn't do a better job than Bush. I'm sure they would, actually. Presidents learn from the mistakes of past presidents. I'm sure Obama or Hilary or McCain will be more likeable, and maybe do a few things that make more people satisfied. Me personally, I just concentrate on myself. Going to work, making money, saving my money and investing it. A president that doesn't mess with those things is a good president to me.

I definitely want gas prices to go down, but at the same time I realize we've been spoiled. Gas is so cheap here because of the way our economy works. We have a very competitive economy. If you can't offer the cheapest gas, people can shop elsewhere. It's not like that everywhere in the world.

[TbTalon94]

Yea I wasn't telling you that you were wrong, in-fact I always agree with your "financial outlooks". I was just stating that the government does have a wee bit of control over what normal people see, but they sure as hell wouldn't lower profit gains to satisfy the average american even if they all knew they could.

[Snowman]

I'm just now reading this, and i'm not going to add anything. But Zac, I think I like the way you think. I'm very impressed, you're not that average "typical" American.