April 30, 2008

Gas Prices Causing Bankrutpcy?

This is just getting out of hand. People are now selling family heirlooms and wedding rings just to buy gas?

To meet higher gas, food and prescription drug bills, they are selling off grandmother's dishes and their own belongings. Some of the household purging has been extremely painful families forced to part with heirlooms.

"This is not about downsizing. It's about needing gas money," said Nancy Baughman, founder of eBizAuctions, an online auction service she runs out of her garage in Raleigh, N.C. One former affluent customer is now unemployed and had to unload Hermes leather jackets and Versace jeans and silk shirts.

In looking at the chart below, courtsy of MSNBC we see that gas just one year ago, April 2007, looks to be about $3.00/gallon. They are showing that the national average for April 2008 is $3.60.

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And according to MSNBC the average miles driven per year in 2007:

Average annual miles per vehicle also declined last year, from 11,946 to 11,856.

Lets do some math shall we?

11,856 miles driven per year (MPY)
.60 cents more per gallon in 2008 (CPG)
average fuel economy 24 mpg (22.2 for trucks & 27.5 for cars, averaged out)

11,856 MPY / 24 MPG = 494 gallons of gas per year (on average) needed.

494 gallons X .60 (CPG) = $296.40 additional dollars for 2008

$296.40 / 52 weeks = $5.70 per week of addtional dollars over last year.

$5.70 equals a Big Mac meal at McDonalds.

There were no doom and gloom stories last year about people going bankrupt and hocking the family jewels to buy gas.

So $5.70 more in gas each week is the number that sends most of america over the edge of not being able to afford gas.

We really are in trouble.

Posted by Quality Weenie at April 30, 2008 11:02 AM | TrackBack

Averages are fine, but not a true reflection - and this from an analyst.

MANY people commute. I did. To the tune of 1/2 a tank of gas a day. (at the job a year ago). I WILL NOT be willing to commute at this time. Can't afford it.

Also....I made my living driving. Was reimbursed .505 a mile. Gotta tell you - my previous employer owes me a little over $4100 for just under 2 months work. I was spending 1/2 of my pay just in gas to do my job. THEN had to wait for the reimbursement. And believe me when I say there are a LOT of folks in that position.

The conversations I've been having is with people in that very boat discussed in the beginning of your post.

Personally? I had to choose often between food, utilities and gas. I had to choose gas as without it I couldn't do my job, so then I'd be screwed every which way.

The gas prices are REALLY hurting more folks than anyone realizes. Many people can't even afford to work. Period.

Posted by: Tammi at April 30, 2008 12:22 PM

Tammi, your situation isn't normal. Most people do not drive for a living.

The average person communtes 16 miles each way.

Average means that there will be some higher then the number and some lower then the number, but most people will fall at that average number.

So for the average person an additional $5 or even $10 a week for gas, if it is making them decided between gas or food then they have bigger problems.

Posted by: Quality Weenie at April 30, 2008 12:34 PM

The price of gas screws us all in multiple ways be it a tank of gas or food in the fridge. It affects the prices at the grocery store, the clothing store, the hardware store, everywhere.

Was oil undervalued? Sure. Will we ever see $1.00 a gallon? Nope, those days are gone. But to see the cost of fuel continue to increase, the gas and oil fat cats continuing to get fatter and no help from employers with cost of living increases (forget that, be happy to have a job right now) makes for challenging days for many.

Do we drive too much? Tree huggers and common sense would say yes. Are there better alternatives to gas than using food resources (i.e. corn)? Yes. Should we be doing more? Again, common sense and tree huggers say yes. Will there be relief and alternatives anytime soon? Absolutely not. Politicians are making money and the rich get richer. Screw the little man just trying to keep up his little part of the world.

Life sucks some days.

Posted by: Lee Ann at April 30, 2008 01:13 PM