Are Gas Prices REALLY Too High?

According to AAA’s Daily Fuel Gage Report, the average price of gasoline in the United States is $3.89 per gallon for regular gasoline (87 octane). If you’ve turned on a radio or television in the last week or two, Americans have made it clear that the current gas price tag is too high.

Gas is a commodity, and if you saw Trading Places like I did, you know that the price of commodities can fluctuate. This is something that we, as consumers, have to be prepared for. Now brace yourself, I’m going to try to do third grade math – this might get messy.

Let’s say gas was $2.50 per gallon and your tank holds 15 gallons – that’d be $37.50 a fill up. At today’s price, it’d cost $58.35 to fill that same tank to capacity. Now that is certainly a big jump in price, a difference of $20.85 – but really, we’re talking about a difference of $20 bucks, which I think we can all agree is not a huge sum of money. Is your budget flexible within a range of $20? It probably depends on how much money you make. The average household income in America is somewhere between $40k and $50k. I’m at the bottom of that scale personally, but I can handle a $20 swing, but then, I don’t do a ton of driving. If you live in the south, where things tend to be farther apart, you probably fill up once a week – I tend to fill up twice a month. Now we’re talking about a monthly budget swing of $80 a month for weekly fill ups – again, I think we’d all agree that this isn’t a huge amount of money, but I personally would be grumpy about an additional $80 bill on my monthly stack of invoices.

This calculating of budgets makes me consider: what are willing to pay for, and how much are we willing to pay for it?

As far back as I can remember, we’ve been complaining about gas prices. I remember people saying $1.00 was too much, $1.50 was too much, $2.00 was too much, and so on. You’d think that at this point, after what we’ve seen in the last decade, no gas price increase would shock us, but people still seem genuinely surprised when the cost at the pump rises. Still, I don’t see many hybrid cars on the road, I still see tons of SUVs wandering around and we, as a people, seem uninterested in weaning our addiction to gasoline. These choices, coming from a society that doesn’t want to pay a lot for gas, seem odd to me.

One of the stranger phenomenons I’ve come across in my life has been the rise of bottled water and people’s willingness to pay for it. In the greater New York City area, the water that comes out of the tap is fairly easy to drink, and if you buy one of those little carbon filters for your faucet or a water pitcher for your fridge, you’re all set. What I mean is, there really isn’t any reason to buy bottled water, but people do so anyway. In fact, they pay through the nose for it – sure, when you buy one of those 16.9 oz bottles for $1.25, it doesn’t seem like a lot of money, but it kinda is a lot for such a small amount of water. See, there are 128 oz in a gallon, so they’re really charging you $7.57 per gallon of water. And yeah, I get that if you buy a gallon of water, it costs less, but I see those 16.9 oz bottles everywhere, so I’m guessing people either buy those bottles in bulk or don’t mind paying $1.25 for them… probably at the store in a gas station. Hell, orange juice costs more than $3.89 per gallon – good thing we’re not currently involved in convoluted discussions with Florida about a potential war with Cuba or something.

$3.89 per gallon probably is too much for most working Americans to pay for a gallon of gas, but we should be pressuring the government to help us recover from our addiction to gasoline rather than bitching at them to find a way to lower the price. The state of New York figured out a long time ago that it was cheaper to help people quit smoking than to treat smoking related illnesses, and it’s time to do the same thing when it comes to the cost per barrel of oil.

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About Jamie Insalaco

Jamie Insalaco is the author of, and editor in chief of

Posted on April 18, 2012, in observations and tagged , , , . Bookmark the permalink. Leave a comment.

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