Due to our rigorous vehicle test schedule here at Green Car Journal, we are very aware of the fluctuating pattern of fuel prices. Fuel economy testing requires regular and sometimes daily fill-ups. This past week was telling. The price of leaded regular shot up more than 30 cents in a matter of five days. Premium fuel is once again over $4.00 per gallon.
Regardless of the price fluctuation’s root cause, the end effect is the numbing of consumer reaction and outcry. I remember the conversations across the gas island at my regular station when gas prices topped $3.00 per gallon. The reaction was even greater when gas first topped $4 per gallon.
When consumers cut back on driving and fuel consumption, the price generally retreats, but generally not quite to the same level it was at before the increase. The pattern repeats in a general upward trend until the average consumer now thinks that gasoline prices below a certain threshold like $4.00 seems like a bargain. Over time, consumers are desensitized to the price at the pump as it edges upward.
As fuel prices reach new highs, vehicle-buying habits certainly change. Fuel economy becomes a priority. Hybrids and fuel-efficient models move quickly. When the market can’t sustain higher prices, however, and prices slump, fuel economy lessons are often forgotten. Vehicle purchases tend to revert back to less efficient models. All the while, the long-term trend is that the price of transportation takes an ever-larger bite out of the household budget.
Some feel that higher fuel prices are a good thing, forcing consumers into more fuel-efficient transportation choices. I’ve never agreed with that stance because high gasoline prices hit lower income consumers the hardest. When the necessary work commute takes an extra twenty bucks each week, many simply must cut back on other essentials. Those living on a very tight budget often can’t afford to trade up to a more fuel-efficient vehicle.
As I’ve noted before, my biggest gripe with higher fuel prices is less apparent but has a widespread impact. When the price of fuel goes up, nearly all goods and services will cost more. Farmers rely on diesel tractors to cultivate and harvest the food we eat. Transporting food and products we use on a daily basis requires diesel fuel. Nearly every product you use each day is moved multiple times by a diesel truck. From moving raw materials to the manufacturer to finished products cycled through the distribution chain, everything becomes more expensive. These are hard costs of doing business that can’t be absorbed and must be passed along to the end consumer in the form of higher prices for the essentials of our modern life.
I am fortunate to test and evaluate some of the most fuel-efficient vehicles in the world on a regular basis. As a benchmark, our family go-to vehicle is a 2003 Honda Pilot. The seven-passenger Pilot has been a trusted all-mission transport that simply does everything well. From hauling a pack of home school kids through winter weather conditions to moving our youngest into a college dorm, the Pilot continues to deliver great performance. Now, with over 150,000 miles on the odometer, we continue to average 21 mpg. In the 10 years we’ve owned the Pilot, however, the price to fill the tank has more than doubled. The price of anything we rely on so heavily doubling in one decade is a reality check that can’t be ignored.
Todd Kaho is executive editor of Green Car Journal and CarsOfChange.com