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Gas Prices: Are You Ready for $5.00 per Gallon at the Pump?

This article was written by in Consumer, Featured. 24 comments.

One of the benefits of no longer having a daily commute is I’ll be spending much less for fuel in my car. When I traveled to an office five days a week, and even when my travel schedule was changed to four days a week to allow one day for remote access, I filled up my tank once a week. You can see my history on my Fuelly profile, which also shows that each weekly stop at the gas station cost more than $20. The costs with my Honda Civic are obviously less than the owner of a more gas-guzzling car might pay, but I’m not sad to see this expense go.

There are a lot of factors that go into the cost of a gallon of gasoline, worldwide demand for oil, supply in reserves, and the value of a dollar to name a few. The former CEO of Shell has said American consumers should expect to pay $5.00 per gallon by 2012. Though not all industry experts agree, to be safe we should continue to prepare for high gas prices. According to AAA, the price of gas has increased 16% in the past year. This is a real cost that consumers and businesses must pay, yet official inflation figures from the government do not reflect the increase in cost to consumers.

Compared to other locations throughout the world, gasoline in the United States could still be considered cheap. On the other hand, the countries with the highest prices are those that do not produce their own oil, while the United States does produce a significant portion of the oil we use.

Offsetting my decreased cost for fuel, my energy bill will surely increase. With more time spent in my apartment, I’ll be heating my apartment during the winter and cooling it during the summer. It will be another month before I can determine my energy usage and the new costs, but it may not only replace but exceed the difference in my gasoline expense.

CNN Money

Updated January 5, 2011 and originally published December 29, 2010.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 24 comments… read them below or add one }

avatar 1 Anonymous

After you get a look at that first year or so of heating bills, there is plenty of stuff that is easy to do that will lower your energy, and can easily be done even if you don’t own the place. As far as the gas pprices, I’m not really looking forward to them. I currently spend $75 or so per week, and I’m trying to work remotely more often.

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avatar 2 TakeitEZ

I don’t think driving a car will be affordable for me if the prices do go that high. I think mass transit will look more and more attractive and likely more affordable. Luckily I live in the Northern Jersey/NYC metro area where mass transit is readily available.

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avatar 3 Anonymous

Filling up the car costs about $50 per week. I don’t think it would cost that much in heating bills since I work home. So it is a saving for us and I’m glad we made it!

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avatar 4 Anonymous

When I retired, the only spending category that went down significantly (>$1,000/Year), was that stinkin’ tank of gas I put in my car every week to drive back and forth to work. By working from home you’re getting an early start on that savings. Since my wife didn’t work the home heating and cooling didn’t change so I can’t compare your additional cost. That said, I still can’t see those additional cost diluting your gasoline saving completely.

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avatar 5 Anonymous

I don’t buy it. Experts have been predicting $4 gas for years, but aside from that crazy time in mid-2008, those prices are just a figment of the nay-sayers imagination.

Gas prices have bounced around between $2.50 – $2.65 per gallon for the past year and a half year in Fort Collins. Even if you say it has simply increased that 15 cents (which isn’t the case, it was $2.65 in the summer, $2.55 in the fall, and $2.65 again). That’s only an increase of 6%

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avatar 6 Anonymous

We’ve been buying an oil ETF (NYSE:DBO) to hedge against high gas prices. I know it isn’t a direct hedge, but it provides some protection against $5/gal gas.

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avatar 7 Anonymous

In some areas of the country we could see 5 dollars a gallon for gas. It is suspect a barrel of oil could reach 200 dollars and if that happens…..welcome 5 dollars per gallon of gas.

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avatar 8 Anonymous

I live in CT, and it cost me $3.28 per gallon to fill up yesterday. I telecommute 1 day a week and am considering asking to increase that to 2 days, depending on what my raise looks like this year.

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avatar 9 Anonymous

Wow–$5 a gallon. We are cheap compared with other countries, but this would certainly put more financial strains on families. I know it will strain our budget more! My husband and I both have a vehicle, and we each fill up every week (approximately 28 gallons). So right now, our gas bill is about $75 per week, and would jump to $140 per week if it goes to $5 a gallon! Yikes!

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avatar 10 MR

I hope that natural gas will remain a stable energy source, so hopefully the hit on you staying at home won’t be too bad.

Good point about inflation, no matter what the government measures, increases in the gas price is inflation to me!

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avatar 11 Anonymous

Gross. I would seriously start considering all the driving I do if gas was $5/gallon. Bike more and ride public transportation more.

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avatar 12 Anonymous

Don’t forget wear and tear and mileage-based maintenance on your car (plus consumables like brakes and tires), as well, now that you’re no longer racking up those commute miles, and the cost of your time to commute.

You could probably, if you wanted to nerd out enough, also estimate the difference in clothing requirements w/r/t fuel costs. After all, a sweater you wouldn’t be caught dead in outside the house is still warm, and your cat won’t think less of you if you re-wear the same jeans and flannel pajama pants a couple of times in a week. The coffee shop staff won’t care either.

In the end the dollar costs probably still don’t even out, but it’d be interesting to calculate. (Signed, Happily Working At Home In Fingerless Gloves Today)

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avatar 13 Anonymous

You make a n excellent argument to buy an electric car and have solar panels so you can get off the grid. Hmmm, not a bad idea! I think the solution to high energy prices is coming, unfortunately not fast enough.

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avatar 14 Anonymous

“…, yet official inflation figures from the government do not reflect the increase in cost to consumers.”

The government inflation figures DO include gasoline. CPI has gas in its figures. Look at any detailed chart of CPI on the BLS site and they will list gasoline.

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avatar 15 eric

Nope, not ready at all. :(

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avatar 16 Anonymous

I think it is so wonderful that you were able to quit your job. I looked for a post specifically discussing this, but only saw bits and hints here and there. Did I miss it? $5 a gallon for gas would be very difficult on me as I travel 100 miles round trip each day. I do work at home one day, but am in the office three days a week. I get 300 miles from each full tank. Right now I’m nearing close to $50 to fill my tank and spend at least $200/month on gasoline. Would love to work from home all the time but it’s not feasible. I suppose if the prices got up to $5/gallon I would push my employer to allow me to come in one day a week and take whatever I needed home, and telecommute the rest of the time. The CEO doesn’t really like people to work from home, but he might understand if the prices of gasoline were to rise that high. I would hope. Otherwise it would be better for me to quit and find a job closer to home.

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avatar 17 Anonymous

Same old story! Yes- I was hit with oil problems in 1974. My answer then and now was/is a human powered vehicles- a recumbent trike. 36 years later; I still have a recumbent trike- and an electric velomobile. So yes; I *AM* ready. It is so sad that people do not learn from history.

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avatar 18 Anonymous

I would love to work from home, but that would mean being self-employed. Being self-employed means providing my own health insurance, which will cost significantly more than gas, even at $5 per gallon.

As of August, though, my day job is part-time (with full benefits!), so I’m only in rush hour once per day which makes commuting both much more user-friendly and more fuel-efficient.

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avatar 19 Anonymous

I am worried about gas getting this high. I told my husband I might have to get a bike and ride it to work (3 miles away).

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avatar 20 Mike Maguire

Hearing all this talk about high gas prices has me considering payment a higher rent to avoid a long commute and the volatility of gas prices.

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avatar 21 DaniofMN

I am seriously considering using the bus for my commute. It will require some schedule changing and sacrifice, but I don’t want to pay $5/gallon!

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avatar 22 tigernicole86

I’m looking to move and the commute will be a little longer than where I’m at but they increase I get should be worth it.

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avatar 23 faithfueledbennetts

No, I am not ready to pay over $5 a gallon in my circumstances. We live in a very rural area, about 30-45 minutes from shopping and work. Hiking gas that much would put a really big dent in our income, forcing us to think about living elsewhere, closer to in town. We already try and consolidate our trips to make the most of the gas tank, this would make it nearly impossibly to live ‘normally’ without second guessing where we live.

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avatar 24 Anonymous

We just are going have to cut off or down on extra trips and try not to work to far from home if possible thats all that I can say. When I had a car some gas went to travel to work but most of my gas money came from mutiple trips to stores, leisure I didnt work that far from home though 3 miles or so. We will have to try to make less trips to stores less often like once a week or once a month if possible instead a few times or if its on the way to work etc… as well if this increase goes into effect. It will be redioulous and to much increase wont last long if they want the demand for gas that they always had.

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