Where's the Cheap Gas at?

Finding cheap gas has been a top priority for people in the United States for the last five years, but it has only been in the last year or so that the issue has really started to substantially hurt your wallet. I remember back in 1991, at the start of the Gulf War when gas rose to about $1.30 per gallon in my area; people were throwing a total fit. Not that there wasn’t good cause for it since the average cost of a gallon of gas at that point hovered around one dollar per gallon. So in reality, this presented us with a 33% price hike over a period of a few months. At today’s prices, that would equate to a jump from $3.35 per gallon to $4.45 per gallon in a short amount of time.
The saying has been for quite some time that adjusted for inflation gasoline is still not at its all time historical high. The previous standard was set in 1981 with an adjusted price of $3.15 per gallon. That benchmark had been surpassed in 2007; now making gasoline the most expensive it has ever been in US history. So getting to the topic at hand; where is the cheap gasoline? This can be looked at in two ways. For one, why are gasoline prices at such records highs, and two, where can you find cheap gasoline, if you even can?
The first part of that question is a lot easier to answer then the second. One of the major reason fuel prices have gone up so high is the extra demand for fuel by developing countries. For example, China’s fuel consumption is responsible for over thirty eight percent of the total growth in world oil demand. Couple that with the rapidly rising Chinese currency versus the weakened American dollars and you can see that cheap gas is more prevalent in China, therefore the demand continues to go up.
The next part of the equation has to do with refining capacity. The refinery process is what turns crude oil into gasoline. In the 1980’s, there were over 300 refinery plants owned and operated by Big Oil in the United States. This really helped in maintaining cheap gas prices. That number is now down to under 175. The main reason for this? A lower amount of refineries keeps supply limited. And with a high demand that limited supply helps keep prices high. But big oil companies profits are not the entire story, as there profits account for only twenty nine percent of gas costs. There are several small and large players that have there hands on fuel prices as well. From the start, where oil is located and retrieved, to where a barrel of oil is sold on the open market, transported, refined, transported again, and then sold at your local gas station. There’s also a gasoline tax on every gallon of gas sold. In the last 15 years or so the gas tax accounted for almost fifty percent of every gallon sold, but now that number is down to around fifteen percent.
So will we ever see the return of cheap gas prices in the United States? We will probably never see $2 per gallon gasoline again, but it is possible they we may see a fuel price ‘bubble’ that may bring a price correction at some point in time. What would precede such an event? It could be such things as a strengthened US dollar, a substantial decrease in gasoline demand due to a substantial increase in high gas mileage vehicle purchases, or just a decrease in fossil fuel demands in general due to developments in alternate energy sources.
Is there anyplace to find cheap gas? You can start by visiting a gas price tracking website like gasbuddy.com or gaspricewatch.com. These websites allow you to search viewer submitted gas prices in your region, comparing average highs with average lows. Don’t expect to find any huge bargains, but it is a start if you’re looking to maximize your fuel budget. The next best choice would be to buy a used car that gets really good gas mileage. You can check fuel mileage ratings for a large variety of vehicles at the EPA’s website devoted to the subject.