Gas prices will drive you nuts. Just when you think they’re finally on a downhill slide, they start creeping up on you again (as the AAA chart below clearly demonstrates). Today, people are paying an average of $3.52 for regular, and both retail and wholesale prices have been quietly creeping up since last October. What happened to the glut of oil around the world?
In Michigan, gas prices jumped 32 cents in a week to a statewide average of $3.70 a gallon. Correct me if I’m wrong, but it’s not that far off from the $4 that sent everybody freaking out and buying subcompacts in 2008.
Jeff Lenard of the National Association of Convenience Stores (which sell 80 percent of retail gas) points out that 2013 started with prices at $3.30 a gallon, a record high for the start of the year. But who knows what is ahead? “The reality is that it is difficult, if not impossible, to predict energy prices, or what will affect them,” Lenard said, pointing to Hurricane Sandy and refinery fires in California as causing price spikes last year. Here’s a factor: Punxsutawney Phil didn’t see his shadow, so that could mean an early spring and less pressure on home heating oil, thus lower gasoline prices.
One thing we know with certainty: Americans are buying more fuel-efficient cars. According to the Transportation Research Institute at the University of Michigan, the average combined window sticker fuel economy of cars sold in January is 24.5 mpg, up 22 percent from October 2007. Emissions of that average new car have improved 18 percent since that time.
“We have made relatively huge improvements in vehicle fuel economy over the past five years,” the university’s Michael Sivak told me. “This is especially the case in comparison to the small improvements over the previous 85 years.”
This is good news. It can be disheartening to see the way consumers react to even small drops in fuel prices to go back to their gas-guzzling SUVs, but maybe we’re past that now. People may have realized that gas isn’t really going to get cheap again, though it will continue to fluctuate up and down.
Another survey, this one by Ward’s Auto, shows that the average fuel economy of cars and light trucks delivered in 2012 (23.8 mpg) was up 4.8 percent from the previous year. Real guzzlers getting 15 mpg or less made up less than 0.7 percent of calendar-year sales (down from 2.8 percent in 2011). Meanwhile, 40 mpg and better cars doubled in scope, to 3 percent of the market, and those between 20 and 40 were 8.1 percent. Small cars, traditionally pariahs in the U.S., hit 19.6 percent of the market.
This doesn’t mean that electrics will suddenly start flying off the shelf. Both the Nissan Leaf and the Chevy Volt lost sales last month. But what really matters is a trend toward fuel economy and reduced greenhouse emissions. Higher gas prices will accelerate that trend.
Red-blooded drivers shouldn’t worry too much, though, because carmakers are combining great fuel economy and high performance in the same car. Yes, the new Corvette Stingray gets 26 mpg on the highway. It’s a neat trick, allowing people to have their cake and eat it, too.
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