By Stephen Macaulay

It is a reflection more of the love of alliteration among headline writers, particularly for broadcast outlets, than this is a telling bit of information:

PAIN AT THE PUMP!

Yes, gasoline costs more. It will continue to cost more. But let’s look, for a moment, at that cost.

The average driver, now that we’re coming out of COVID is driving more. This means that compared with the last two years, the demand for gasoline has increased. And what happens to the price of the supply when there is increased demand?

There is another factor. You may have noticed that it is getting warmer. Yes, summer is on the way. Every year the price of gasoline increases as winter goes out and summer comes in because the refineries must change the formulation of gasoline. There is an additive put in the mix so as to keep gasoline from evaporating quite so quickly. That additive costs more.

In addition to which, refineries tend to do equipment maintenance around this time of year, and in order to do that, some of their capacity is taken off line. Yes, that means reduced supply. And another reason why there is an increase in price this time of year. Every year.

Let’s get back to the PAIN AT THE PUMP!

An average driver drives 15,000 miles per year. The average fuel efficiency in 2021 for vehicles, according to the EPA, was 25.4 mpg. So this means that the average driver buys about 590 gallons of gasoline per year.

The price of a gallon of gas this past January, was $2.81 per gallon. So were it to stay at that for a year it would cost the average driver $1,657.90.

Let’s say that gasoline goes to $5.00 per gallon. (Yes, it has already eclipsed that in many places, but we’re talking average across the country.) This means that over a year that average driver would spend $2,950.

That is a difference of $1,292.10 over a year’s time. That’s $107.68 per month. Not trivial, but let’s put that in context.

A tall Starbucks Frappuccino (a.k.a., small beverage) costs on average $3.25. Or 65% of the price of a $5.00 gallon of gas.

There is another factor in all of this.

There is a war going on. A major war. This is causing additional disruptions to the supply chain, specifically the supply of oil.

One thing that tends not to be taken into account when people proclaim PAIN AT THE PUMP! is that the price of petroleum is predicated on the world market.

So if there is a barrel of oil pumped in Texas and a company in Japan says they’ll pay X and X is higher than what people are willing to pay elsewhere, guess where that oil will be sold? Voila! Price increase.

It is completely mystifying what Joe Biden can do about this. Very little, I’d submit.

It all comes down to supply and demand.

SUPPLY AND DEMAND!

Certainly not as exciting as

PAIN AT THE PUMP!