$100 for a Tank of Gas or $120 for A Barrel of Oil? What to do…

Wait a minute I just saw a CNN headline saying: $100 fill-ups arrive at gas pumps

And check this one out: An Oily Mess – Stating that A Barrel of Oil for only $120

Do you see something wrong here? You can get a barrel of oil for $120, but only a tank of gas now for $100? The average American is apparently experiencing one of the hardest to understand economic crises to hit the United States. Do you realize that the money you are making today is worth less and less month after month because of the falling dollar? Even if you don’t get a pay cut or you put the same amount of money into your savings account you can’t buy the same amount of things you always wanted. Just use the above cost of gas for example, and say you make a steady $2000 a month, and last month you were paying for $70 a tank of gas, and this month you are paying $100 for that same tank. Notice that without doing anything different, you have $30 less to spend this month. Thanks to the Fed lowering interests rates to fix the sub-prime mortgage problem and an imminent recession, not only is the nation losing investment into this country but the money we make is worth less and less everyday.

But enough of that, how do we make sense of why we can get a barrel of oil (that contains 42 gallons of oil), but we can only fill up a 20 gallon tank of gas for almost the same amount of money? Well, it all boils down to the entire process of refining that barrel of oil so that it is usable in the form you pump it into your car. Refineries in the US are inefficient at meeting the demand of the consumer, so when the cost of oil goes up the cost of gas goes up exponentially. Because the methods we are using only nets us 19.5 gallons per barrel of oil, which explains why the cost is much the same in terms of today’s market rates. But I don’t remember that when a barrel of oil costs $50, I was paying $40-$50 a tank; my memory serves to tell me that I was paying around $25 a tank. So increasingly, the US can fix a lot of the problem itself if our oil companies could refine a little more efficiently.

But what can we do as a consumer? Here are a few things that I recommend.

-Only buy or fill up your car or truck in the early morning when the ground temperature is still cold. Remember that all service stations have their storage tanks buried below ground. The colder the ground the more dense the gasoline. When it gets warmer gasoline expands, so buying in the afternoon or in the evening, your gallon is not exactly a gallon

-Get a Hybrid, as gas prices go up, you’ll be making back the money on the extra cost you paid for a Hybrid in less than 2-3 years. At this rate, it may be even faster. And besides, it is better for the environment, because in my opinion everyone should be driving hybrids. The sooner you buy, the better too, because the dealerships get smart and start charging more or don’t give out deals on the Hybrids.

-Don’t speed. Cars get about 21% more mileage at 55 mph then at 70 mph. You can save some gas and save a ticket, which saves you even more in the long run including insurance.

There are a lot of other gas save tips out there (you can just Google it), but all in all, it is important to make a difference starting from you. Understanding the reasons behind our nations problems and each one of us doing something about it (starting with you, yourself) will enable us to overcome our worst problems, including recession and energy crises.