Why Is Gas Expensive?
Although the price of fuel is going up year over year, gas prices in America aren't out of control. People want to know if gas prices are going up and why and constantly demand an explanation. The reality is however, that gas prices in America, compared to many places in the world are still quite reasonable.
"The Federal Trade Commission has ruled that oil companies are not gouging customers. They say, technically, they're screwing customers."
I own a gas guzzler. It's a 94 Jeep Cherokee, and although we do genuinely like our car, when I'm at the gas station I hate filling that piece up. Every week I begrudgingly fork over 85 of my hard-earned dollars to Esso in exchange for a way to get to work for the following week. It sucks. We will buy a more fuel-efficient vehicle but for now, it's what we have. Recently I joked with a family member who drives a fairly thirsty vehicle about how much it would cost him to get into town that evening. He replied with this: "I'm getting a great deal on gasoline, people pay way more than $1.29 per liter for bottled water."
And he was absolutely right. I thought about this for a while. Based on my limited knowledge of oil production I can comfortably say it's substantially more difficult and costly to produce one liter of gasoline or diesel, than to dip a bottle into a stream (water of course is the world's most abundant natural resource). I regularly see Dasani water, which is around 600ml on the shelf for $1.79 at gas stations. That means, after griping about filling their car up for $1.29 per liter, people see no issue with treating themselves to a bottle of water at just over $2.50 per liter. Slurpee, Coke, OJ, and many other inexpensive to produce gas station treats also rival or exceed the rising price of gasoline.
Why is gas expensive?
Maybe gasoline and diesel aren't really that expensive when you look at it. Although I don't understand the relationship between the plummeting price of crude oil and rising gas prices in America, it does make sense to me that gas costs what it does. I am willing to be proven wrong but if we can agree that $2.50 is an acceptable deal for a liter of water, how could $1.29 per liter be a terrible deal for a commodity that has to be pumped from deep below the earth's surface? Not to mention refined, distributed, shipped, retailed and still try to find a sliver of profit in there somewhere. Maybe it's not that bad, maybe gasoline isn't too expensive, perhaps the problem is we just drive more than we can afford to.
Don't get me wrong, I think that gasoline is terrible stuff. It burns quite dirty, stinks, does massive damage to the atmosphere. It causes long term damage to ecosystems when it's spilled. I don't believe that the internal combustion engine is the way of the future, it's an inefficient, noisy, archaic machine and there are far better technologies out there. I'm just starting to wonder if gas is as bad a deal as we all make it out to be.
So, perhaps instead of complaining and asking yourself "why is gas so expensive!" next time you find yourself filling up your car up with gasoline, you ought to treat yourself to a cool, refreshing bottle of water...and ride your bike instead.
Don't like gas prices in America? Filling up just once in Europe will change your tune. Just something to think about