Money Mondays: Pain at the Pump

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  • What can you tell consumers about the outlook for gas prices?
    Mellody: I wish I had better news for you. In prior years, Fall marked a time when prices trended downward because people were finished with their summer travel and staying closer to home, but speculation in oil futures is driving the price of gas up every day. The outlook for a significant price decline this fall is pretty bleak. In fact, the U.S. Energy Information Administration (EIA) has increased the average regular gasoline retail price forecast for the third quarter to $3.49 per gallon, 10 cents higher than the forecast in last month’s Short-Term Energy Outlook.

    What’s different this year?
    Trouble in the Middle East has caused concerns over supply. Additionally, predictions for a higher-than-average number of hurricanes doesn’t help, as well as an uptick in demand both at home and overseas. And to top it off, the drought in the Midwest affected much of the nation’s corn crop, cutting ethanol production and causing prices to spike—regular gasoline is about 10 percent Ethanol.

    So how long can we expect to experience this pain at the pump?
    That’s where I have good news for you. According to the AAA Daily Fuel Gage Report, the average price per gallon today is $3.72. The EIA expected regular gasoline retail prices to level out at around $3.53 for the year, which is the same as 2011. Even better, the agency is projecting a 20 cent drop in 2013, with an average price of $3.33 per gallon. And remember, it could always be worse—the all time high price per gallon was set in the summer of 2008 at $4.11 per gallon. Hopefully that’s a record that won’t be broken anytime soon.

    In the meantime, any tips for conserving fuel?
    Absolutely. The obvious way to cut down is simply to drive less. Try to carpool or drive a hybrid. And when you drive, reduce your weight—empty out that trunk!—and cut down on drag, which means getting rid of that 10-year-old bike rack you never use. Increased weight and drag mean you have to step that much harder on the accelerator, using more gas. And while we’re on the topic, slow down! Driving faster increases turbulence and burns more fuel. Also, try not to brake and accelerate in traffic on the highway. It’s better to lay off the brake and coast when you can. Inertia keeps you going uses less gas than accelerating.
     
    We all know that turning off the A/C helps, but there are other benefits to having your car properly tuned up. For instance, if you’re not using the right oil, the engine burns hotter and uses more gas. Have your air filter replaced when needed. It is said that nearly one in four cars needs an air filter replacement. A clean air filter can improve gas mileage by as much as 10%. At today’s price, that’s 37 cents a gallon!
     
    Also, be sure your tires are inflated properly. Reducing the contact area of your tire to the road reduces friction, slightly improving your gas mileage. If you don't need snow tires or chains, remove them. Don't drive around all summer with snow tires. They are softer and have a deeper profile, which increases friction. Improper alignment, an untuned engine and even a missing gas cap can hurt your mileage, so make sure you have your car serviced well and often. Finally, don’t idle. If you are stopping for more than 30 seconds, turn off the engine.
     

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    3 thoughts on “Money Mondays: Pain at the Pump

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