Today’s post is going to start off pretty gloom and doom, but hopefully by the end of it, you’ll realize that no matter what the price of oil (and then gasoline) becomes, there are still plenty of ways you can change your driving habits to stretch your money even further.
I came across an interesting article posted on reddit.com that talked about the effects on the global economy, specifically America’s economy, if oil hits $100 per barrel. Since I tend to be a realist (a kind word for a pessimist), I think that the article should have been changed to be more about WHEN, not IF, oil hits $100.
Editorial comment: Let’s be honest here, this is really just the beginning of the meteoric rise in the price of oil. With the increased demand from emerging economies such as India and China (who happen to account for nearly 2/5ths of the world’s population), an increasingly volatile Middle East (where hatred of America seems to be the only unifying theme), and with the likelihood of production DECREASES in the near future, the chances of the price of oil dropping are about as slim as the chances of this article making it on the front page of Digg. Thinking the price of oil will slow or top out at $100 seems pretty optimistic.
Anyway, back to the post. The author of the Business Week article seems to think that, for the most part, the world economy should weather the $100 storm just fine.
However, the author does believe that Americans will feel the biggest effect. A lot of this has to do with the fact that Europeans are already paying the equivalent of $7 or $8 per gallon and more than likely their gas prices wouldn’t increase much. Americans, on the other hand, would see gas shoot from roughly $3 (already 300% higher than where it was in 1999) to around $5, another 66% increase.
I don’t know about you, but having to spend $60 to fill up my little economy car is certainly going to reduce my discretionary income.
Since there appears there’s not much you can do to stop the increase in the price of gasoline, you’re going to have to take other measures to help offset the extra money you’re going to spend.
(This is where the article gets decidedly more optimistic)
By making slight changes in your driving habits, you have the ability to “offset” the rise in gas prices by 20% or more. And, once these more efficient habits replace your bad habits, you’ll save hundreds of dollars per year!
For example, by utilizing the following three tips, you can increase your fuel economy by 10% (roughly $.30 per gallon) or more:
Even doing just these three simple things will net you an extra couple hundred dollars each year.
And, with the way things look, I’d start saving as much as I can.