Winston Churchill once said that there is nothing more exciting than being shot at and missed.
With all due respect to the man that saved Europe, nothing gets the heart racing like the gas needle doing the tango with Lady ‘E’ of the dashboard. Despite the mini panic attack that some experience every couple weeks or even days with their cars running on fumes, there will still be those who can’t help themselves from letting the tank run low.
These people put in $5 or $10 at a time, telling themselves they don’t have the time, or in some cases the money, to fill it up more. They hit the highway for a 20-mile stretch even though that pesky gas light came on 14 blocks back. They park the family car in the driveway with just enough gas for the next person get to the pump ... hopefully.
This is what happens when the average gas price is more than $4 per gallon.
It may surprise some out there that gas prices are closely watched by people in every financial walk of life. For lower- and middle-class families, the reasoning is obvious, as the average family spent more than $4,000 on gas in 2011, or about 8 percent of their budget.
What Wall Street and Main Street have in common is an obsession with gas prices. (Yes, I do plan on punishing myself rather severely for using my most hated political cliche).
Just ask the grandaddy of them all, the 500 pound gorilla of the retail industry, the slayer of small-town business everywhere: Wal-Mart. There is a direct and negative correlation between Wal-Mart’s revenue and rising oil prices. Simply put, gas prices go up, spending money for Americans goes down, Wal-Mart suffers. Oh, the humanity.
But I digress. My point here is that Americans shouldn’t expect gas prices to go down in future years. As the global economy begins its painfully slow climb back to pre-recession greatness, demand for gas will go up because the public will have more money to spend. And as I’ve considered myself something of an economic expert ever since that gift of a B- in macroeconomics, I can tell you that when oil demand goes up, so do the prices.
There are many intricacies that go into a discussion about gas prices. Chinese demand for oil has skyrocketed in recent years, turmoil in the Middle East can lower the supply, and the auto industry is working to develop cheaper hybrid cars. No one can predict what will happen to oil prices in the future.
What I can tell you is that if you happen to share a car with one who enjoys watching the wrestling match between the needle and the far left side of the gas indicator, don’t expect lower gas prices to remedy your situation.