Gas prices, on average, came down considerably over the past year.
And while it’s clear American drivers are grateful for the more manageable costs, MainStreet wondered exactly what those savings amount to. So we did some number crunching for you.
- Currently, the national average of the cost of gas is $1.63 per gallon.
- This summer, the national average was $4.10 per gallon.
- The drop saves the average commuter $100 per month.
- According to a 2005 survey by the Census Bureau, the average commute lasts 24.3 minutes, or about 20 miles. If you drive to and from work five days a week, 50 weeks out of the year, that's 10,000 miles.
- FuelEconomy.gov says the average mpg rating on cars is 18 in the city and 25 on the highway. With a 55/45 spread on how often people drive in those conditions, this becomes 21.25 mpg for the average car.
- So that 10,000 miles works out to 460.6 gallons of gasoline a year. That’s just commuting. Are you with us?
- At this summer's prices ($4.10 a gallon), those 460.6 gallons would cost $1,929.41 a year, or $160.74 per month. If the trend of low gas prices continue ($1.63 a gallon), as experts believe it will through 2009, your monthly cost of gasoline drops to $62.58,
- Which saves you nearly $100 per month.
(You can re-crunch these numbers for you own commute by using the same formula.)
How Long Will the Savings Last?
Barring a weather disaster affecting oil refineries or a sudden upswing in people looking to take long vacations this summer, gas prices should hang around two dollars a gallon for the balance of 2009, according to Ken Medlock, a fellow at the Baker Institute at Rice University ,where he is a professor of energy economics.
"With the financial crisis and the recession, there is an income effect as well that will keep people from taking big vacations and that’s usually what causes gasoline prices to jump in the summer," he said.
His prediction rests on the notion that crude oil will remain at its current price, mostly because of long term efforts to reduce gas consumption.
"We saw people start to make moves to become more efficient. Once you trade in that SUV and get that fuel efficient car, those sort of things stick around," he says of behaviors with lasting effects on crude oil prices. "You’ve also seen lots of movement towards alternatives and incremental supply. OPEC’s been having to cut production."
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