Wednesday, January 7, 2009
Gas prices are on the rise again! But relax... your trusty price historian is here to enrage you all the more!
Yep, in addition to my database where I track weather predictions and results I also have one with oil prices vs. gas prices. It's not overly robust- a mere 24 entries going back to July 26, 2008. My hope is to see some kind of logical trend between the movement in the price of oil vs. the price of gas, even if there is some lag. But as yet I've only seen that when oil moves up or down five points the price of gas only moves one point.
For instance at it's lowest (that I recorded) oil was on 12/22/2008 - $39.91 per barrel. Gas was $1.66 that day (a price derived from the handful of gas stations I pass on my way to work. I've found that they are often in the mid-range of gas prices you find on those "GET THE LOWEST PRICES" gas web sites).
Yesterday the cost of oil was $48.58 and the price of gas was $1.99 per gallon. Checking my records the last time oil was around $48.58 was December 3, 2008 ($46.79). Was gas two bucks at that time? Nope, it was $1.69. What was the price of oil when gas was last around $1.99? $62.41 per barrel on November 10. Does that mean when gas next hits the very un-lofty price of $63 per barrel that gas will cost $3 per gallon? Something stinks and it isn't gas fumes.
One thing to note is that the federal gas tax is set twice a year. For example if the price of gas is $3.50 and the tax on that gallon is set to be 40 cents then even if the price of gas falls to $1.67 in the next six months we are still paying 40 cents in tax on that gallon. Yes, it was work in our favor should the price shoot up but if it does I'm sure they will pass some legislation to recover their "losses".
NOTE: In the chart above the price of gas was multiplied by ten so that it would be easier to see movement in comparison to the price of oil.