Oil Prices And Your Money

Oil prices have soared in recent weeks putting gas prices at near record highs in the U.S.  America is a very car-obsessed and car-dependent country so gas prices are what’s in the news.  But don’t think that rising oil prices will only affect you at the gas pump. 

Tons of things we all use every day as this article details are literally either made of oil or depend heavily on oil for their manufacturing. 

But it all comes back to gas for most.  Despite the fact that over 40,000 Americans die by car every year – well over 100 people per day – cars are worshipped by a large portion of the population and permeate all aspects of our popular culture. 

The average American drives a jaw-dropping 14,000 miles per year, so gas prices are what’s on people’s mind because they burn a shit-ton of it everyday. 

Being that I barely drive and don’t burn much gas myself I wouldn’t consider myself the best person to dish out advice about saving money on gas, aside from the obvious advice to drive less and walk or bike more.  But I blog to help people with money and I’m here to contribute.

Some Tools

This AAA site with an interactive map does a good job of showing the general picture of gas prices across America including state averages and the national average. 

If you are taking any road trips or if you got on the RV bandwagon during covid like thousands of others, you need to be aware of price variances by geography.  RV’s and sprinter vans get horrible gas mileage so filling up strategically in cheaper places can literally save you hundreds of dollars. 

Another great tool if you drive a lot is the app Gasbuddy.  The app searches for the cheapest prices near you and also has it’s own gas card and reward system.  Full disclosure – I’ve never used it and am not affiliated with them in any way but online reviews seem mostly positive. 

As you probably know most of the major oil companies have their own credit cards and reward systems.  Again, being that I ride my bike way more than I drive I’m not the person to recommend any in particular but if you spend a lot on gas it’s probably in your best interest to check out sites like Nerdwallet who compare those sorts of things. 

And if you happen to be in the market to buy a car, this list from Car & Driver of the most fuel efficient gas burners might be of help.  Or you could get a hybrid or fully electric vehicle.  Regardless of what you get, remember that savvy financial people buy used.

Third Order Effects

Now onto the more difficult truths.  Most things are going to get more expensive.  Inflation in America crested 7.5% recently and many “experts” had already predicted it to rise over 8% this year – before the war in Ukraine started and the oil price spike. 

Now that 8% number looks more assured. 

That banana you enjoyed this morning from Ecuador doesn’t get here by teleportation.  If you’re like many Americans you have no idea where Ecuador even is.  Having been there I can assure you it’s far.  And transporting that banana takes oil, lots of it. 

Aside from the transportation of goods issue in a global economy, so many things are literally made with oil or petroleum derivatives.  Here’s just a partial list of 144 of the more common ones.  I’m 100% sure you used something on this list today.

Yeah, guilty as charged.  I got this list from here, and as they explain that’s just 144 taken from over 6000 items.  Are all of these items going to increase in price because of rising oil prices? 

I can’t say, but being that inflation was already raging before the oil price spike many probably already have increased over the last year.  And it’s more likely they will now. 

This FAQ page from the U.S. Department of Energy is a great read to learn about many aspects of oil and petroleum in the U.S.

My Dilemma

I’m now going to be selfish and explain a dilemma these rising oil prices have put me in.  The current tires on my Subaru Outback still have about 5,000 – 7,000 miles left on them according to my mechanic and pass inspection, but are getting close to end of life. 

I drove a meager 1671 miles in 2020 and 2147 miles in 2021.  So at that rate I should be able to get another 2 years out of my tires, but I plan to do more road tripping this year and in the future.  And my current tires are more vulnerable to getting a flat, plain and simple. 

Tires are largely made of oil, and the increased prices are probably not fully reflected yet, but they’re coming.  Right now the cost for all 4 tires will be approximately $1,000.  I fear if I wait it might be more like $1,500 and might never come down. 

But at the same time the frugal freak in me who hates waste abhors the thought of replacing the tires while they still have good life left in them.  That to me seems just, well, wasteful.

So savvy financial warriors, what would you do in my situation?