Practically Speaking

Kyle and her husband moved to Brookfield in 1986. She became active in local politics and started blogging in 2004. Her focus is primarily on local issues but often includes state and national topics, too. Kyle looks at things from the taxpayers' perspective in a creative, yet down to earth way, addressing them from a practical point of view.

Typically, gas prices are lower in August than May

Energy, Just for fun!, Living well on less $, National Parks, THE ECONOMY, TRAVEL

We rekindled our love affair with road trip vacations in 2001 when our son was finally old enough to endure 3 days of driving at a time, and we were able to afford more dependable transportation. Instead of our usual 2 hour drive to some favorite State Park for 2 weeks of camping, we graduated to visiting various National Parks out west. It has been great.

Because of our road trip habit, I've payed attention to gas prices. Beginning in 2001, when prices spiked in late spring, I would wring my hands with everyone else and worry how high they would go by August (the time of our departure.) But it seemed every year, gas prices went down about 40 - 50 cents/gal by the time we hit the road. (Good reason to plan your driving vacation late in the summer.) Photo shows $3.79/gal on July 25, 2008 at Speedway on Greenfield and Sunny Slope Road, that is about .50 cents lower than earlier highs this summer. 

Experience taught me to not fret too much about what would prices be by the end of summer? I would assure myself the price would come down later in the summer, and they did. Unfortunately, the lower price of August was usually .25 to .50 cents/gal higher than the year before! 

I checked my travel journal for some past August price examples*. You can see the prices increases nearly every year:  2003 - $1.59/gal, 2004 - $1.83 to $1.93/gal, 2005 - $2.53 to $3.47/gal (California' price), 2006 - $2.99 to $3.19/gal, 2007 - $2.85 - $3.09. Notice the prices in 2007 were cheaper than 2006, but that was the exception to the norm.

The AAA agent told me Monday, the price this summer is $1.19 higher (nationwide) than last year's gas prices. That is a higher jump from years past. Some other market forces are at work.

USA Today attributed the oil prices drop to fewer miles driven in, Cost at pump dips as demand, oil prices fall,

Drivers in the USA logged 9.6 billion fewer miles in May than in May 2007, the government reported Monday. It was the third-largest monthly drop in 66 years.

But to me, that alone cannot account for the downturn in oil prices. If you look at the graph to the left, you see that oil prices started declining more steadily around the time the President announced he was removing the moratorium on offshore drilling. I believe if the Congress would approve domestic drilling, we would see more declines. 

If you look at the chart from this 2nd article, US drivers Log 9.6 B fewer miles in May, you see that Americans have been driving significantly less all year. May did not even mark the largest downturn, March did. If the price of oil was so dependent on driving alone, March's decline should have triggered a crude oil price reduction, shouldn't it have?

The data released Monday show that Americans drove 29.8 billion fewer miles in the first five months of this year compared with the same period last year, a 2.4% drop. The dip continues a seven-month trend beginning in November. Americans have driven 40.5 billion fewer miles from November through May compared with the same period a year earlier.

I believe we must start drilling in America if we want to see oil prices really decline. (Domestic drilling would also keep  billions of US $ at home, but that is another subject!) We are on a hair trigger as it stands now, where any natural or man-made disaster could push prices up. 

Unrest in non-OPEC countries, such as Nigeria, could push prices higher. Militants in that country sabotaged two oil pipelines Monday, driving crude prices for September delivery up $1.47 a barrel. A major hurricane in the Gulf of Mexico also could send oil prices higher.

"We could always have a spike to $150 a barrel," Smith says.

For right now, we can relax just a tiny bit and enjoy the typical price decrease of .40 to .50 cents/gallon in August. Too bad it is still .70 cents a gallon more ($1.19 nationwide) than last year!


*In 1979 gas prices were under 50 cents a gallon in the early summer! (Good thing.This was our 5 1/2 week, 8,000 mile Way Out West camping trip.)

Click here to sign the DRILL HERE. DRILL NOW. PAY LESS domestic drilling petition and see the latest links to related oil news (updated every day).


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