Gas is cheap compared to Jack Daniels
Posted by Richard on June 9, 2005
An oil industry research firm released a study comparing the price of gasoline to other liquids. You’ll be shocked, I’m sure, to learn that an oil industry research firm concluded that gasoline is a bargain:
"On a per-barrel basis, gasoline is America’s bargain liquid: 10 percent cheaper than bottled water, a third the cost of milk, a fifth the cost of beer, and less than 2 percent the cost of a bottle of Jack Daniels," the study said.
That’s really wonderful news. Now, if cold cup of gasoline were only as refreshing as a Sam Adams… Or if a fifth of BP would last me as long as a fifth of JD…
OK, I’m being a bit snarky and cynical. After you get past the absurd, meaningless comparisons with a random set of liquids (why no comparison with Chanel No. 5?), there actually are some interesting numbers in the study:
Compared with other standard expenditures, the increase in gasoline prices since 1982 is 25 percent lower than the increase in food prices, 50 percent lower than the rise in housing costs, 70 percent lower than the rise in medical costs and a whopping 80 percent below the rise in college tuition, the study found.
Now, that’s a more meaningful comparison, although there is a caveat: their starting point, 1982, must be somewhere near the all-time high (in real dollars) for gasoline, coming at the tail end of the energy crisis caused by the abomination known as the Carter presidency. I’d like to see how gasoline price increases compare over other periods — say, since 1965 or 1990.
I was struck by something else about those numbers, though: look how much variation there is in the rate of price increase from one category to another. And notice that prices are rising fastest in the categories with the most government involvement. Gas and food (relatively free markets) have been pretty stable compared to health care and college costs (both heavily subsidized and regulated). Housing (increasingly impacted by land use restrictions, environmental regulations, etc.) is somewhere in the middle.
Back to the oil industry research firm’s rosy picture of the gasoline situation, they do manage to put the recent price hikes into perspective. For most people, it’s not that big a deal:
Also, average annual gasoline usage has been holding at about 10 gallons a week per vehicle over the past 10 years, the study said.
So a 50 cent increase in gasoline costs the average driver an extra $5 a week — about the cost of a glass of Pinot Grigio or a healthy shot of Jack Daniels.
Of course, I’d hate to have to give up yet another weekly shot of Jack in order to stay within my budget. But I may not have to:
U.S. drivers will see gasoline prices at the pump rise during June, but could get a break in July and August, the government said Wednesday.
The federal Energy Information Administration said retail gasoline prices will increase over the next few weeks to reach the agency’s projected June average of $2.16 a gallon.
The EIA said gasoline prices “may stabilize and even decline slightly” during July and into August.
I’ll drink to that.
Bert Wiener said
‘Gas is cheap compared to Jack Daniels’ – and tastes a damn sight better too!!
Anonymous said
You must have been inhaling the fumes, Bert. I prefer Wild Turkey myself, but I’ll take a JD on the rocks over an Amoco Silver. I just don’t care for that “octane aftertaste.”
Jesse in Poughkeepsie said
It seems to be that gas prices were around $0.35 per gallon back in 1965. So, adjusted for inflation, gas should cost about $2.16 now. So anything above that is price gouging.
It seems that other news sources are looking at the highest gas price in history to calculate present price expectations, which would push the price to nearly $3.10. That is an incorrect method and is only being used to prepare us for what surely will come.