The community has been under siege by high unemployment and massive foreclosures and now, here comes escalating gas prices … what’s next?
By Jennifer Bihm
Cleo Reynolds mumbled a few expletives as he watched the digital numbers on the Shell station gas pump. Unleaded was $4.15 last Monday in April and as he watched the price move up rather quickly; it seemed disproportionate to the slower moving numbers that showed the amount of gas he was getting. For a split second, he seemed taken aback at being asked his feelings on the amount of money he was paying for gas.
Then, leaning back against his SUV, arms folded, unlit cigarette dangling from his lips, he began his tirade. He was against paying $10.65 for a little over 2 gallons in his SUV that particular day and more so about the over $100 he ends up paying weekly that allows him six days of driving. The Inglewood resident makes a daily trip to Los Angeles where his wife works, he told L.A. Watts Times (LAWT).
“At least $500 a month I’m spending on gas, it’s ridiculous,” said Reynolds who is 70 years old.
“I drop her off. I go back to Inglewood, then I come back. I have to drive my truck because riding the bus for me is no good. It’s too much crime.”
Like Reynolds, others at the gas station had to briefly pause when asked about how much they’re paying and how they felt, as if they had almost quit thinking about it. Some said they cut out extras like eating out. Others cut way down on shopping. While others like L.A. resident Dee, who was reluctant to give her last name, just quit driving. “I don’t drive right now because my car broke down,” she said.
“[But] I’m actually finding that riding the bus has been a lot easier on my wallet and it’s been less stressful.”
All reported paying between $40 and $100 a week to fill up their tanks.
For his part, Reynolds said he frequents the food bank more than the grocery store for savings.
“There is no reason the gas prices should be this high,” he continued with vehemence.
But experts say there are a myriad of factors that have an effect on gas prices.
How are Gas Prices Determined?
“Gas prices will usually peak sometime in May,” this year being no exception, said senior petroleum analyst Patrick DeHaan.
“This is because refineries are doing maintenance in late winter and early spring. By the end of May they’re done and gas production goes full tilt.”
Full tilt production and a high demand for gasoline in the United States seem to have a major impact on rising gas prices. According to the U.S. Department of Energy website, Americans make use of about 20 million, 42 gallon barrels worth of crude oil per day. Of each 42 gallons, 19 are used to fill up motorists’ tanks.
Despite having enough oil in its own back yard to be the world’s third largest oil producer, the U.S. also depends on foreign oil, mainly The Organization of Petroleum Exporting Countries (OPEC), which affects gasoline costs. OPEC (Libya, Nigeria, Qatar, Saudi Arabia, Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, the United Arab Emirates and Venezuela), which controls almost half of the world’s crude oil supply can increase or decrease its inventory. Simply put – increase lowers prices, decrease raises them.
OPEC’s monthly report for April 2011, cited factors like the unrest in Libya and the disaster in Japan as contributions to increased oil prices.
“Prices initially spiked in February with the onset of the supply disruption in Libya and concerns that supply outages could spread to other producers in the Mideast and North Africa,” the report says.
“Indeed, Libyan unrest has cut output by almost 80 percent…”
[Furthermore,] “Supply concerns, and the associated risk premium, were later dampened to some degree by the triple catastrophe in Japan: the earthquake, tsunami and nuclear problems, which has led to a persistent disruption in the Japanese energy complex. The overall impact of the tragic events in Japan on oil consumption is far from clear,” OPEC’s report continues.
“While the devastating earthquake caused a sudden decline in the country’s use of oil, this is likely to be broadly offset by the need to substitute some of its shut-in nuclear power capacity with oil-based generation. Moreover, with the start of reconstruction efforts – currently estimated at $300 billion – this is expected to require even higher energy use.”
Refining costs, taxes (which can determine gas prices from state to state or even city to city), marketing and distribution and gas station profits round out the list of gas pricing factors.
Myths and Facts
Back at the gas station, Jose (another L.A. resident who didn’t want to give his last name) said he wishes that he could pile more money into his savings account but the hour long drive to his school puts a real dent in his wallet. He uses about $60.00 a week to fill his tank, he said. For people like Jose, the saving-money-on- gas discussion has become increasingly relevant and replete with all kinds of advice, as people try to find ways to keep more money out of the pumps and in their pockets. LAWT asked DeHaan to clarify some of the myths and facts.
One myth, he said, is that certain gas stations are better than others.
“I wouldn’t necessarily say there is higher quality gas but many different refiners add different blending components and additives, different detergents,” DeHaan explained.
“The government mandates that all gasoline has a minimum amount of detergent to make sure your engine stays clean. Some manufacturers argue they have more detergent (therefore) better gasoline. But let’s just say all gas shipped from refiners are tested for quality issues.”
DeHaan also explained that yes, using the air conditioner and not making sure tire pressure is up to par will waste gas. However, he said, premium gas as opposed to unleaded is really a non-issue.
“Buying premium instead of unleaded is a complete waste of money,” he said.
“There is absolutely no situation where a car needs premium. Now, premium is generally used in higher horse power vehicles or if you are towing. It (makes the engine) less prone to knocking. So, with heavier loads you want a gasoline that resists pinging a little bit more. Then you can avoid catastrophic engine damage when you’re towing. That’s essentially the only difference. But many vehicles don’t require premium and don’t need it so it’s a waste.”
Gas saving tips
Driving between 30 to 60 miles per hour, minimizing accelerating and
breaking, and avoiding idling are a few steps consumers can take to keep gas in their tanks longer. Also, getting rid of excess weight (unnecessary bulky items for example) and getting regular vehicle maintenance can make the most of gas mileage. Finally, CBS Consumer Correspondent Susan Koeppen said that gas experts recommend buying gas early in the morning when it’s cold and the fuel is denser, getting more gas into the tank.
Other tips include, combining trips, taking advantage of ride sharing, avoiding rush hours and driving a more fuel-efficient car if possible.
For more gas saving tips and locations visit: