Portfolio Return as of 05/20/22:
2020: 25.65%
2021: 29.15%
YTD: 4.11%

Tuesday, October 29, 2019

On a three-week road trip, and the price of gas

I just spent three weeks on vacation, and drove 4,100 miles round-trip from Austin, TX to Traverse City, MI, with side trips to Ann Arbor and Petoskey.

Petoskey, Michigan
I drove through Texas, Oklahoma, Missouri, Illinois, Indiana and Michigan. As the trip progressed, I paid increasingly higher prices for gasoline, from about $2.15 in Texas and Oklahoma, to $2.50 in Illinois, and $2.60 to $2.75 in Michigan.

There are three factors that drive the price of gasoline at the pump: The price of oil, the amount of taxes per gallon, and the distance from refineries.

As you'd expect, Texas and Oklahoma have lower gas taxes (by as much as 50%) and are much closer to refineries, driving down the cost of transportation.

What I find interesting -- though everyone likes to complain about the high price of gasoline at the pump -- is that gas is not that expensive, if you factor in inflation. In 1968, while I was in high school, I could buy gas for 30 cents a gallon. If you factor in inflation, that is $2.21 per gallon in today's dollars. See Inflation Calculator.


Some more information on gas prices and energy markets:

IEA Cuts Crude Demand Growth Forecast as Supply Continues Outpacing Demand
Pump Prices are a Treat for Majority of Motorists

No comments:

Post a Comment

Thanks for the comment. Will get back to you as soon as convenient, if necessary.

Price controls again? Some people never learn

As I've mentioned before these pages, price controls that were last employed on a widespread basis during the 1970s inflation era were e...