Due to a combination of events including Covid-19, the Suez Canal 2021 container ship backlog, and the current Russian invasion of Ukraine, there are gas supply-side issues that are driving up prices. At one point, the U.S. was producing enough gas domestically to not have to import any gas from overseas. These are some reasons why we are in economic turmoil today!
During the past three months, we hit 40-year highs for inflation over a 12-month period. From February of 2021 through February of 2022 the inflation rate was 7.9%.
What does this all mean? To examine the rise in the annual inflation rate, we must first go back and examine the recent past. Look at the annual inflation chart since 2017 below:
Calendar Year Annual Inflation rate
2017 2.1%
2018 1.9%
2019 2.3%
2020 1.4%
2021 4.7%
2022 9.0?
From February 2020 through February 2021, the overall inflation rate has been 7.9%. Inflation is felt across our economy, starting at the supermarket as food prices have gone up by 8.6%.
These days, pulling up to the gas pump is somewhat of an adventure and a major topic of conversation. The cost of gasoline has gone up 38% since last February 2021. There are significant ripple effects of these gas prices, as over 70% of our goods and services are trucked across the country.
Have you recently taken a cab ride from one of the airports? Drivers from yellow cabs, Uber, and Lyft for the most part, use their own money to gas up their vehicles. There are not enough vehicle charging stations (yet) available for cabs currently, so they must rely on gas-powered vehicles. In order to earn a living, they must pass on the majority of their gas price increases to their ridership!
As of this writing, California has the most expensive gas in the country. Their average cost is $5.57 per gallon, the only state with an average cost of over $5. More than one friend of mine texted me a photo of a Shell station in Los Angeles charging $6.99 per gallon of regular gas! The states with the least expensive gas are Kansas and Oklahoma, both averaging $3.79 a gallon.
Unless the “Keystone Pipeline” project gets reawakened, I don’t see this issue subsiding anytime soon. Windmill power is being developed and many years away, so me must reply on gas. Gas prices can vary as much as 10-15 cents a gallon even a few blocks or miles away. The savings add up over time!
Heed My 7 Tips to Save Money at the Gas Pump:
- Wholesale Clubs: Members of wholesale clubs such as Costco, Sam’s Club and Krogers receive member discounts on gas!
- Pay with Cash: There is a saying, “Cash is King!” You can usually save between 5-10 cents a gallon when you pay in cash. If you have a big truck or SUV, this adds up quickly.
- Loyalty Programs and Gas Cards: Nearly all gas stations have some type of loyalty program. Most of us are creatures of habit and fill up at the same station or two. Sign up at the stations you most often frequent or consider changing stations.
- Investigate Your Credit Card Rewards: Check to see if your credit card company has any deals on gas purchases, even if only in the short term.
- Time it Just Right: According to GasBuddy, the best day to save at the pump is Monday, the day that has the lowest gas prices in most of the country. Do NOT fill up if you see the gas delivery truck leaving the station! There are air bubbles that can temporarily negatively affect the gas quality until they have time to settle.
- Smart Phone Apps: Downloading apps, such as GasBuddy, Gas Guru and the AAA mobile app, can be helpful, especially when traveling. Also consider downloading CityMapper (a fluorescent green icon) which gives you the time it takes to get to your desired location by train, bus, citi bike or walking and it shows the estimated calories you will burn by doing so.
- Check the Internet: Before embarking on a road trip, you can check in advance online where the cheapest gas is. For example, www.NY1.com/gas is one site you can check in advance of road travel.
Spring is officially here this Sunday and there will be more cars on the road. The bottom line is, a little bit of reconnaissance can save lots of $$$$! Let me know how it goes at Rob@InsuranceDoctor.us.