The Ghostly Green Light of False Hope

Today, and as expected for the rest of the week, barring, of course, any unforeseen calamities that will allow for a sudden increase in gas prices again, most of the United States will see the average cost of fuel hovering just below the $4 mark, except in the cases of the usual suspects as far as unaffordable gasoline go (California, Alaska, etc). Fantastic! Hooray! What a deal…thank you random deciders of the future of American transportation!

America is go this week! Load up the kids, visit the Grand Canyon, drive across a few states just because you can, people.

Sheesh….

While it’s difficult to argue with the point that we are all getting a welcome break this week, the constant fluctuations in gas prices are leading to a sense that we should all remain calm and keep filling up our tanks because pretty soon, there will be some kind of break in the spike and we can return to life as normal.

This lowering of pump prices and subsequent high levels of publicity surrounding such drops makes us complacent as it lends to the feeling that all of our bitching is having some kind of impact; that someone high up in an office in Dubai or Washington is listening to the complaints of ordinary citizens and has decided to step in and save us all from what we know is forthcoming. The fact is, there are a number of variables having an impact on this sudden but not really significant dip in the price of crude, thus the amount you pay to fill up your tank and rest assured, none of them have anything to do with feelings. Yours, mine, or theirs. In a few weeks, something will happen and they will be back again, higher than before, although who knows by how much.

I'm heading up to Northwestern Ohio tomorrow to visit the parents and filled up the tank today after an almost 20-minute wait at the pump. I passed by the closest gas station because their prices were about 4 cents lower than the one I ended up at and the line to fill up was spilling out over a major roadway. People looked hot and tired this afternoon and while normally, people probably might have seemed a bit crabby to boot, there was actually a palpable sense of eagerness in the air. The same vibe I get when I am at a store with a big sale and there are people ooing and ahhing to themselves, impressed with the delivered promise of a deep discount. It was primal. And frankly, a little depressing.

It's a green light for me tomorrow too and I will readily admit it was nicer to fill up for 3.80-something rather than over $4. I noticed again as I was filling up that I seem to kind of glaze over as I watch the cents add up to dollars before I've even had time to flip the little switch that holds the pump trigger down for my convenience. I rationalize and wonder when the day will come that when I go home to visit I have to budget for it like I would if I was taking a flight instead. Is that two years from now or ten? Am I jumping the gun? Is there nothing to fear?

What Makes You So Special, Wichita, Kansas?

And so today in arbitrary gas wackiness; a few hours ago, in fact, the Lundberg survey came out with its assessment that gas prices have fallen to the discount rate of under $4 per gallon and, on a feverish note, quickly sent it out on the press swill. The highest prices are in Alaska, which one can easily understand given the transportation costs to lug the stuff up there, no surprise there but get this: the lowest national price is in Wichita, Kansas. Wichita. While I’m happy for the good folks there who can expect to fill up for a tick over $3.64, I am, like many others, forced to question why Wichita? Why not King of Prussia Pennsylvania or Hell, Michigan (they both exist) or the Speedway down the street from me with the mustache lady and 98 cent gallon-sized cups for fountain drinks?

In cases such as Hawaii and Alaska, for example, gas prices are high for quite obvious reasons. It costs quite a bit to transport the gasoline and the base price is far higher than anywhere in the country. In states with crazy prices such as California, for instance, it is worth keeping in mind the fact that the taxes on gasoline vary from state to state. Oftentimes, the states that already might be facing higher fuel costs because of (and who knows how valid this really is, as often as we hear it) transportation costs also have exorbitant taxes on top. States with notoriously high gas prices like California and Michigan also have upwards of 7% in taxes to pay whereas there are plenty of states, such trusty old North Dakota, for instance, that have spared their citizens that cost.

If you have ever been curious about how much you’re really spending on tax versus the gasoline itself, I recommend this chart that offers a state-by-state breakdown of gas taxes with revealing comments about the nature, function and amount of the tax. It uncovers a rather enlightening bit of information, all neatly organized into pretty graphs, which is always a bonus for me whenever numbers are involved. Chances are, the first thing you’ll notice is that wild variation between taxation across state lines that might help to explain the current situation that presented us today with record nationwide lows in Wichita. While some states have no tax and relatively low prices that are commensurate with rest of the country, Kansas is only slightly above average in terms of pre-tax gasoline per gallon and only has a 1 cent per gallon “environmental” tax (which sounds a lot better than other taxes such as the ubiquitous “Petroleum Products Gross Receipts Tax” in Jersey or the equally nefarious-sounding “company franchise tax”—both of which sound like they line the pockets of oil companies themselves).

Before I hit the sack I’ll leave you with some good news and some bad news. According to the same report from Lundberg making the web circuit at this very moment, gas prices, “barring any dramatic change in the global oil market…may soon pull back another 10 cents per gallon” which is sweet. And a nice gesture. But the bad news is, none of it makes sense, all of it is illogical and the only way to interpret it is to pick between 10-20 reliable news sources, mine for quotes from oil industry experts and then cry. Taxes do account for some of the price variances across states as do transport and related costs, but in general, don’t feel silly for ever saying that it is still kind of arbitrary.