It seems so long ago and it certainly was a different world back then. But just before the events of Sept 11 2001 the cost of a barrel of crude oil was $18! Now it is over ONE HUNDRED DOLLARS! But what does a dollar buy now? Certainly it buys far less than it bought 7 years ago. We know that much for sure. After all, the mass media tells us every day about the incredible shrinking dollar.
Integrating inflation we get a very different calculation of the cost per a gallon of fuel than our eyes tell us when we see a 3 or a 4 at the fuel station to the right of the dollar sign.
If we consider the price of fuel commensurate to wages in 1920 we could now be facing a gallon of fuel costing over $10! It can assuredly be stated that the cost of a gallon of fuel has decreased since the 1920s consistently if factors such as inflation and wages are properly considered.
Another fact that Americans have to be appreciative for in regards to one of the things that we most like to complain about, is the comparison of fuel prices in the USA compared to European prices.
A gallon of fuel in Europe is now averaging $5 or more. And what is worse is that approximately one-half of that goes only to paying oppressive taxes! In America, the percent that you pay on a gallon of fuel that taxes account for, including inflation, which Dr Ron Paul correctly labels a tax, is about ? or just over 70 cents. Without inflation considered as a tax the amount is about fourty six cents or around 13% compared to 50% in Europe. (Of course we are also paying 10% inflation whether you want to label it a tax or not).
Now, let's compare what a gallon of fuel costs compared to one gallon of other consumable items if they were sold by the gallon, this is another eye opener.
A gallon of milk is $2.99, which is quite close to a gallon of fuel which is presently roughly $3.25 or so. A gallon of shampoo would be around $40. A gallon of real maple syrup would be around $57. Jack Daniels would be around $100 per gallon! A gallon of Crisco oil would be around $75 and a gallon of nasal spray would be around $2.615!
So what is it about the price of a gallon of fuel that makes it such a big deal? I believe that there are two reasons and one is the profit margin of the oil companies and the other is the rapidity at which a gallon of fuel is consumed.
For instance, how long does a gallon of fuel last you? Ok, how long would a gallon of nasal spray last you (depends on the size of your nose I propose ha ha)? How long would a gallon of Jack Daniels last you? Maybe you shouldn't answer that one!
So that is one reason. And another is the profit margin of the oil companies keep and the perceived greed of these companies going back to Rockefeller and more recently to J R Ewing!!
Exxon profited $8 billion from January through March of 2007. They average around ten percent profit on EACH dollar worth of fuel sold
So it is not the price of a gallon of fuel more a matter of how rapidly we use up a gallon of fuel and the incredible profit margin grabbed per gallon by rich bastards who we see as wanting to screw us for a dollar.
So the real solution is in how do we improve our MPG
And the best answer to that is by converting from gas to gas/hydrogen hybrid engines, thereby increasing our MPG by 20-30% or more. Or you can convert to a fuel cell hydrogen only system which means you will never have to purchase a gallon of gasoline for the rest of your life!