Gas prices won’t be lower for long. Here’s how to handle what happens the next time there’s a surge in gas prices.
Gas prices are up. Then they’re down. Then they’re up. Then they’re
down up down.
At the very moment, gas prices have been in a bit of a decline. See here:
But they’re not going to stay that way.
So I’ve got some bad news and some good news. The bad news is that there’s not really much you can do about it right now. Not in the short term.
But the good news is that you have time to plan what to do the next time that gas prices start to go up.
Table of Contents
It’s no one’s fault (and everyone’s fault)
First, stop trying to pin blame on any one cause for higher gas prices.
Oil is traded on the world market. The surge in oil prices (from which gas prices are derived) are affected by things that happen well outside of the purview of the U.S. (such as the war in Ukraine, vagaries of the Middle East, etc.)
So now matter what political party is in power in the U.S., it’s not their fault.
And it’s not worth drawing down the Strategic Petroleum Reserve to make oil prices go down. The U.S. has been doing that recently, and it’s only shaved off 40 cents a gallon, not the type of thing that’s going to make a massive difference. especially as an unsustainable solution (the reserve isn’t infinite).
That said, oil prices, like anything traded in a market, is driven by supply and demand.
So the more we use, the more demand there is, and the higher the cost.
True, it’s not as simple as that, but because we use oil in so much of how we live our life, from gas in our cars to the cost of shipping all of our Amazon Prime purchases, we all have a say in gas prices.
And while we can’t individually affect the geopolitical situation of oil prices, I’m here to tell you what you can do now, so that you’re better prepared when gas prices start their inevitable climb up again.
Choose where you live
Where you live is the single most important choice you can make when it comes to the full cost of gas prices.
The closer you are to the places you drive to, the less gas you will consume. This will affect your life every day, from your commute to work, to your getting groceries, to hanging out with friends.
Many people I know think of the size of the house as the biggest factor in where to live. But what your home is near, and the cost of getting there, is an important and often-overlooked factor as well.
And as a bonus, if you live in walking distance of places, or are near public transportation, that can reduce your gas consumption down to zero.
Choose where you work
If you can’t move, you could try moving where you work.
The less you need to drive to get to work, the less gas you will use.
I know remote work isn’t an option for many people, but if it’s something you could swing, that will definitely affect your commuting cost downward, for sure.
Choose what you drive
But not everyone can up-sticks and move somewhere else to save money at the pump, or be in a position to change jobs.
In which case, your next choice is what it is that you are putting gas into.
You’re going to get a different car eventually. Gas mileage should factor into your purchase.
Fuel efficiency is increasing in cars, and are mandated to reach an average of almost 50 mpg by 2026.
I think that fuel efficiency is often neglected when determining the total cost of ownership of a car.
But simple math tells you that this is too important to miss. If you drive 12,000 miles a year, and your car gets 20 mpg, at $5 a gallon, that’s $3,000 a year.
If your car gets 30 mpg, that’s $2,000 a year. There, you just saved $1,000 every year.
And if you go even higher, say, to hybrids making 50 mpg, you’re down to $1,200 a year.
And if you get an electric car or a plug-in hybrid, well, your cost is zero.
Choose (not) to drive
I know not everyone can do this, but I have to mention that if you don’t have a car, you don’t have to care about gas prices.
I went car-free for a year, and it didn’t kill me. I rented cars on occasion when I needed them, and rode the bus and biked the rest of the time now.
If you are interested in how you can do that with a family, I recommend checking out a site like Bike Portland, which has all sorts of missives from families who get around by bike. It is possible.
Choose to not care
The current price of gas in Iceland is $8.695 a gallon.
In fact, take a look at the average prices of a gallon of gas in various countries.
Gas in the U.S. is cheap by international standards. I know we believe that our birthright is to have cheap gas to go where ever we want, and live in huge houses dozens of miles away from anywhere, but that’s an illusion. And anyone who tells you that gas is going to come down super low is trying to con you. This is likely as good as it gets.
That is, unless you wish to move to Turkmenistan.
So I would suggest to you, in addition to all of the above ideas, that gas prices are not the place to put your focus in your financial life.
Instead, you can make a bigger impact by being more intentional about your spending, reducing/eliminating your debt, and investing for the future.
Filling up your tank with rent
There’s a psychological reason why we focus so much on gas prices, and why they affect the political winds more than, say, property taxes.
It’s because you see prices posted on billboards everywhere you go. And because you watch the meter rise as you pump gas. (Note to New Jersey and Oregon residents; the meter rises when people pump gas.)
But imagine if you paid rent or the mortgage the way you pump gas: imagine what it would feel like on the first of the month to see the meter go up: $500…$1,000…$1,500…$2,000. Don’t you think you’d be up in arms?
Think about that next time you complain about $5 a gallon gas.
I’m just saying, context is everything.