Listen. There is no question that most Americans are feeling pinched at the pump. Whether you are buying gas for your family car or diesel for your fleet vehicles, the higher fuel prices certainly hurt. But, why?
Maybe the fuel prices are a pain in the pump because…
- …it’s almost the only item that is advertised and sold all by itself. It used to be you could only get gas at a gas station. Imagine if you had to drive down the road to get your bread at the bread store and passed big signs everywhere that gave the price per loaf. Or, what about something crazy like toilet paper. What does a single roll of toilet paper even cost?
- …you have to buy multiple gallons of gas or diesel fuel at one time. When you buy anything in bulk you are more sensitive to the cost per unit. If you went to the store to get 22 gallons of milk or 18 boxes of cookies you might be more sensitive to the price per gallon or pound. A friend of mine told me he buys 10 pounds of turkey at the deli every week to make lunches for his three teenage boys. He was thrilled it was on sale this week for $4.99 a pound instead of the regular $9.99 per pound. That means he normally pays almost $100 just for deli meat. That’s more than a full tank of gas for the average car!
- …you watch the meter while you’re filling up at the gas pump. The dollar signs go higher and higher with each ounce. Even the new pumps with TV’s can’t take your focus off the meter for long. Could you imagine if there were tracking meters on everything? How about a meter inside your house that showed your spending on electric usage every second of the day? Or, what if there was a counter in the corner of your flat screen that posted a tally of your viewing time and cost per minute? This constant tracking would drive you crazy.
Okay, I know times are tough; wallets and corporate budgets are tight. And I am not trying to be some big moneybags kind of guy that doesn’t care what the big oil companies charge for fleet fueling. But, I just want to point out to consumers and fleet managers that gas prices and diesel fuel prices are probably some of the cheapest things we buy, considering.
Considering what? Ok, let’s take a look…
- Gas prices in1920, adjusted for inflation, would be $3.33 a gallon today. That would also be if the gas tax has not increases all of those years. The federal gas tax is currently 18 cents a gallon and the diesel gas tax is over 24 cents a gallon. On top of that add state taxes and even local taxes in some places and you could be spending another 40 cents per gallon. In a lot of states that means you are paying 50 cents per gallon to Uncle Sam.
- Let’s talk about your latest coffee run to Starbucks. Do you realize you actually pay more per gallon for coffee than gas? Remember that as you reach in your wallet for a five-dollar bill to cover the cost of just one Venti Caffé Americano. And, it’s only 20 ounces, or only about a fifth of a gallon!
- As an FYI, 1 gallon, US liquid = 128 ounces, US liquid. Now look at the cost per gallon of some everyday household items.
- Milk, easy $4-$5 a gallon
- Paint $20-30 a gallon
- Heinz Ketchup $3.19 for 15 oz, or $27 a gallon
- Men, check your hardware drawer for Super Glue. The same .14 oz size container can cost over $8, or $7,314.
- Ladies, look closely at your makeup and perfume that is sold in minute fractions of a fluid ounce. Just .14 oz of Lancome Mascara can cost $29. That’s not 14 ounces, but point 14 of an ounce, or $26,514 a gallon.
Now switch gears for a minute and ask yourself where your fuel comes from? Well, that stuff you put in your car or fleet of trucks to make them go is derived from crude oil that is only available in certain areas of the world and not that easy to get. First someone has to drill two miles into the ground to find it. Then, the thick tar like material is pumped up to the surface and sent via trucks and tanker ships about 10,000 miles away and across oceans to refineries. At that point the crude oil is put through a very complex series of processes called refining. The crude oil becomes either gas or diesel fuel and pumped into a pipeline where it travels 200 to 2,500 miles at a whopping 10 mph to a terminal. The fuel hangs out at the terminal for a while and then another tanker truck brings it to your local gas station. Pretty complex, labor intensive and logistically challenging right? Sounds expensive too. Do I dare suggest that our fuel may not even cost as much as it could?
To sum it all up, I guess that life would sure be easier if they just gave gas and diesel fuel away for free. Just like they did during the Carter administration, oh wait, but that was free cheese. Well, I guess it would be better than nothing.
To sum it all up, I hope my priceless information has given you a new perspective so that the next time you’re at the pump it won’t be as painful. And, be glad you don’t need a tank of Chanel No. 5. at $110 for .25 ounces — or $56,320 a gallon.