Gas prices were under $2.00 per gallon when Obama took office; now it is approaching $5.00 per gallon. The Republicans are fond of shouting this statistic from the rooftops as evidence of the failure of the Obama administration. And just last night watching the news, NBDC did a “man on the street interview” with people worried about the price of gas and how the increase would have a severe negative effect on their lives.
Well, before we begin, let us cite Disraeli: “There are three kinds of lies: lies, damned lies and statistics.”
Look at the chart below, which depicts the average price of gasoline in the country for the period February 22, 2007 to February 21, 2012—five years.
The most obvious things about it are the two peaks, in August 2008 and May 2011 and the precipitous drop to the bottom of the valley on December 31, 2008. I remember well the drop in 2008, when oil sold at the all-time record of about $144 per barrel and the price at the end of December of that year of around $32 per barrel. No one even tangentially associated with the oil and gas business will ever forget that drop.
The point is, is that the price when President Obama took the oath was preternaturally low and is an unfair point at which to evaluate the pricing of gasoline, as if the President has more control over that than OPEC or Big Oil or, refining capacity in the country.
Let’s use $2.61 per gallon as the standard then.
Cost to commute
Say 15 miles each way to work with a car that gets 25 miles per gallon. Say the price is now $5 per gallon, up from $3.62 per gallon in December. Compared to the $2.61 per gallon, the commuter will lay out $2.85 a day more, $1.65 per day more based on the recent $3.62. Yes, it matters, some, but probably each person wastes that much a day now.
Let’s say, a family of four jumps in the Family Truckster in Tulsa and heads for a two-week vacation in Washington D.C. Compared to the price of $2.62 per gallon, the drive will cost about $300 dollars more; $170 more than it would have cost last December.
Now, this ain’t peanuts, but really, how does this affect the two -week vacation? Well, for 14 days, it adds between $12 a day and $22 a day. Divided by four is $3 to $5.50 per person per day. Made up easily on a lower cost restaurant for one meal per day or by packing a cooler with pop and water and bypassing the retail prices. Or, visit the local grocery store (I have it on good authority they exist in D.C.) and get the fixings for breakfast and lunch and eat out only once a day.
Assuming Tom Bodette leaves the light on for you and the family can sleep for two weeks in a tiny motel room without someone being arrested for murder, the 14 nights will set up back about $110 per night before taxes, around $1,500 for the whole shebang. So, if you cut out a couple of nights, it’s about even. Or stay at a Best Western thirty miles out of town and save $12 – $15 a night.
My point is, yes it will cost a bit more, but really it will not or should not cause one to make a different decision about vacations. If you cannot go ona vacation, theer are a lot of legitamate reasons, but the run-up in gas prices is not the whole reason; less so, Predinet Obama.
I am affiliated with the oil and gas industry, working with small oilfield operators and service providers, but this is not the only thing I do for money.
I recently traded in my gas-guzzling Porsche for a Prius based on the status of the warranties and gas mileage.