Hallelujah gas prices have dropped

Now is the time to fill your tank. Not tomorrow.

Los Angeles, CA, November 2008 - "Hallelujah gas prices have dropped!" I'm yelling this to myself today after seeing a gallon of Shell unleaded posted at $1.81. I mean, wow folks, it is great to see gas prices dropping like this. And just in time for the holiday season. As I'm driving through some of the wealthiest zip codes of West Los Angeles I still find gas as low as $1.90.

A year ago I remember filling the tank of my 1997 Nissan Maxima with 89 grade gas cost me almost 70 dollars! Today as I pull out and merge back onto Sepulveda Boulevard, my gas station bill is only 33 dollars. Way to go! As Christmas and New Year's Eve get closer, lower gas prices sure mean spirits are up. People at local gas stations are filling up the tank with 25 or 30 dollars again which makes it a lot easier on their pocketbooks. And that's more to spend for American families on the upcoming Christmas shopping spree... "This cannot be a mere coincidence", I utter silently to myself while waiting at a traffic light close to Wilshire Boulevard. "Well, consumers have to be encouraged to spend somehow... So why not in retail. That's a way to try and inject fresh money into this decaying economy. Maybe it'll jump start this stalling engine". The guy behind me is honking and flashing his lights. Probably because the light has turned green, and cars are already zooming by in the other lane. I do too much thinking and driving for my own good.

By the looks of the crowded pumps, it might seem like falling gas prices are a good thing. But experts say it's only the silver lining on a very dark economic cloud. "Prices are only going to stay low as long as the economy is crummy," said Notre Dame Economics Professor Tom Gresik. As soon as the economy begins to strengthen, Gresik foresees prices will go back up. Economics Professor Jerry McElroy believes the recession will likely last at least until the middle of 2009. "Therefore we could expect the demand for gasoline and oil to be down," he said. He also said we should start to see signs of economic improvement late next year. But McElroy also noted gas prices could drop even lower in the meantime. "We could see gasoline back to $1.50 a gallon," he said. "But again, I think it will only be short-lived." That, said Notre Dame Professor Tom Gresik, means prices will not go up anytime soon. If you're trying to set up holiday travel plans, both professors advise you should take the trip.

But Gresik said the time line for when the economy and gas prices begin climbing depends on what happens in the White House. "There are different predictions and a lot of it all depends on what new President Barack Obama does in office."

According to AAA, the average price for a gallon of regular unleaded gasoline in California is $2.08 in November of 2008. This time last month it was $3.36. One year ago in Los Angeles the average price for a gallon was $3.15.

In Michigan AAA reported the average cost of unleaded gas in November of 2008 was $2.04 a gallon. One month ago it was $3.25. This time last year, a gallon in southwest Michigan cost $3.13.

In comparison with most drivers in Los Angeles, my demeanor at the wheel could be qualified as conservative, on the verge of pacific... and I sure don't have a lead foot. Therefore, while not an accomplished hypermiler yet, I usually do pretty good mileage. Still I remember frowning every time I left the gas station last year and the year before... But not today even though I know this driver's bliss will be short lived. I wonder if the guy in the white Cadillac Escalade next to me is aware of it too.

Maybe I worry too much. People like Donna Cass of Encino are happy with current gas prices. "I don't care how long it lasts or why it dropped, I am enjoying it while it's here and will complain later if it rises later". Just do like Donna, folks: seize the day.

More Crunch To Munch On: Hummer H2 vs. Peel P50

This significant drop in gas prices made me want to visualize what all of us spend now in late 2008 versus what we used to spend before. How much does driving 100 miles really costs you on average? How much did it use to cost us before? I am sure you are unable to answer this question right away because you never took the time to calculate it. Check out the table I came up with when I got back home, some figures are pretty astonishing. This might make you want to drive another kind of car if you happen to own one of the thirstier kind:

Sources: MSN autos, US Energy Information Administration (Petroleum segment)

A word about the last row of this table: what on earth is the Peel P50? This is actually the smallest car ever built. It was produced in 1963 by a manufacturer called Peel on the Isle of Man in UK. Only 50 were produced and even though it is as bare as can be, this still is to this day the most efficient production car on the road. It is a sought-after piece of automobile history. If you think about getting one for yourself, beware! Only 20 known models remain worldwide today and each may cost up to 50,000 Sterling Pounds (around USD $100,000). It sits only one, barely has room for a small grocery bag and has no reverse gear. And as far as I know, it is not street-legal anywhere but in the UK. A fun machine to witness but far from a green one: the moped-size engine produces more pollution than an H2. But it is at the other hand of the spectrum for fuel consumption! Watch this hilarious skit from BBC's Top Gear - it's worth it I promise!