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the sudden collapse of gasoline prices

gas price 30 january 2015

On Friday 30 January I stopped by a local Orlando BP gas station (rather rare these days) and filled up my 2012 Prius with $1.91/gallon gas. Spending nearly $2/gallon is still a lot of money to pay for gas, coming of age as I did in the 1960s when gas was around 25¢/gallon (that's a quarter). As a middle-schooler I can remember filling up my gas can for my neighborhood mowing service for $1 (four gallons in a five gallon container), then spending the weekend earning that back at roughly $2/yard.

That low price stayed pretty much the same when I bought my first car in 1971 before I graduated from high school. Gas stayed relatively cheap through 2003, when I purchased my first and only mini-SUV, the Kia Sorento. When I bought it gas was 88¢/gallon due to a local gas war (remember when gas wars were only about selling cheap gas?) Gas mileage on the Kia was round 20-22mpg, and filling its 20 gallon tank cost me less than $20/week.

Then in August 2004 Hurricane Charlie hit central Florida, and the price of gas spiked above $2/gallon. That was a shock to me. Charlie was followed later that year by Francis and then Jeanne. After Jeanne gas prices began to slowly drift downward toward $2/gallon.

But 2004 was just a rehearsal for 2005. That was the year Hurricane Katrina first hit Florida around Miami/Dade, traveled across the peninsula to the Gulf, re-intensified, headed north, and tore the hell up out of New Orleans. And in the process made a mess of Gulf petroleum and gasoline refining. And that's when the price of gas rode well north of $2 and stayed there. The price of gas would rise slowly, unstoppably, until 2008, when I payed $4.14/gallon near Labor Day. While it would eventually drop back below $4/gallon, it never dropped below $3, and I made a promise to the wife to buy my first Prius. I finally bought that first Prius for the family in 2009.

Orlando Gas Prices 7 April 2012

In 2012 gasoline was making another surge to $4/gallon and higher. I took the photo above in early April, and wrote about how high it had gotten yet again. In the blog post that included this photo I thought that gas would hit $5/gallon that year. Fortunately for me and many others, it never did. But it always hovered between $3 and $4/gallon.

Then in a rather dramatic turn of events starting in November 2014, the price of crude began a huge drop, followed by drops in the price of gas. It has now been below $2/gallon since mid-January here in central Florida. I have even seen the price as low as $1.89. One of those gas stations where it's that low is where I once paid 88¢/gallon twelve years ago.

Just as the high cost of gas seems to have had a dramatic negative effect on the Orlando economy, the impact of dropping gas prices has been equally, if more positively, dramatic. A lot more people are out driving these days, resulting in heavier traffic everywhere. I see a lot more people out shopping everywhere. I can't quote any economic statistics, but from what I see I believe that the region is prospering again. I see a lot of construction these days, especially huge apartment complexes, which I equate with affordable housing.

I never saw this drop coming. I'm now paying less to fill the Prius every week than I did when I first bought my Kia Sorento, even at 88¢/gallon. The Prius holds 10 gallons, half what the Kia did. When I fill up I only have to fill six to seven gallons. I'm still commuting the same distance from where I live near Universal Studios across town to where I work near the University of Central Florida. It's taken a decade of car technological advancement (I now drive a 2012 Prius), as well as a change in driving habits (I'm no hyper-miler, but I don't lead foot it any more either) for me to realize these kinds of savings.

I had to go through a lot of economic pain to get to this point. Hell will freeze over before I go get another gas-guzzling car like the Kia Sorento. In spite of gas being less than half the price it was back in 2012, I doubt a lot of other folks will buy a big car again, in spite of a reported surge in larger vehicle sales. No, I'm on my way towards a totally electric vehicle, or perhaps I'll move back into the city and just give up the car. Gas, maintenance, insurance and other expenses have made the modern car so unpalatable in the 21st century. I no longer enjoy owning and driving a car like I did when I was a teenage driver. The automotive thrill is truly dead and gone in me.


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