Gas may be at lows not seen in a few years now, but consumers believe fuel prices will rise in time.
According to Automotive News, a survey by the Consumer Federation of America found that consumers expect prices will average $3.20/gal. in two years’ time, and hit $3.90/gal. by 2020:
Not only do these consumer expectations match the last major dip and rise in gas prices (2009-14), but they show that consumers understand when gas goes down, it inevitably goes back up.
The CFA also researched the previous fuel pricing decline and rise, and the fallout from it. In January 2009, the average was $1.84, while in 2014, it jumped to $3.36/gal. Between the two points, most consumers bought lower-mileage vehicles, leading to more pain at the pump as time worn on; those whose vehicles averaged 15 mpg spent $6,400 more on fuel than those whose vehicles garnered 25 mpg.
The group then focused on how consumers would be affected at the pump between now and 2020 if they bought a vehicle that averaged either 18 mpg or 28 mpg, finding that those who opted for the lower average would pay $5,000 more for fuel over the period than those who desired more fuel economy. However, the 1,007 surveyed want their next vehicle to average 30 mpg, compared to their current vehicles’ average of 25 mpg.
Then why are they buying gas swilling trucklets instead of brown wagons?
Because that’s what people want in spite of high fuel prices.
Their leases will be up in 2020 so that when they “want” fuel to be high again and NOT before.
They will simply will it into being low for the next 5 years. Great plan.
or maybe not. I predict that It’ll be $3.90 by summer.
I’ll tell you why, because its about more than money or mpg. Safety is a large concern for many, myself included. I drive a Hummer H3, not the best on gas, but the safety it provides to me and my family justifies the cost of fuel. I will admit that god forbid we have an accident, the other car may or may not fare well against it, but it is all in the choices that we as drivers make. I do take the responsibility of driving such a heavy vehicle very seriously, and drive cautiously with it. Space is also a big consideration. Many fuel efficient cars have next to no space, especially if you have a family to move. Regardless of how expensive gas gets, I will never put that in front of the safety of my family. If a small corolla works for you, then great. Just take the time to look at REAL life crash statistics. I say REAL life statistics because the required government crash testing ratings are bullshit once you get out into the real world. In most cases, mass wins.
Mass is an important factor for safety. I wouldn’t say its everything, but a major factor nonetheless.
The Tesla Model S has a good safety record, its mass thanks to the low slung batteries helps enormously. Its not just the mass of the batteries, but the location of the mass that counts for a lot. Never mind that its structure is super strong and aluminum absorbs more energy than steel.
Next time you buy at least consider some of the alternatives that will save you fuel expense while not compromising real world safety.
JpWhite, I will say this. I do get a lot of grief from people for driving a Hummer, but thank you for understanding part of my choice and NICELY suggesting I look at other fuel efficient vehicles. Some people’s comments are spoken so arrogantly that I completely tune them out. I would consider any suv that can provide me protection, and space. I don’t purposely choose a gas guzzler. The Hummer just happens to provide what I find important in a vehicle, but there are a number of trucks out there that may do the same.
It is nice to have a respectful dialog. So many threads at TTAC resemble more of a sparing match.
I get plenty of grief myself for driving a LEAF. Which is at the opposite end of the spectrum from a Hummer :-)
Enjoy your wheels.
I expect that by like July.
S2k Chris, probably sooner than that if the environmentalists and anti-oil brigade succeed in blowing up a few more refineries.
Nobody did me the honor of surveying me . . . but my thinking is that prices by 2020 will be more in the neighborhood of $6-8.00 a gallon.
Why? The world is awash in oil and new technology keeps bringing more supplies on line. Prices will affect production (high price = more production, low price = less production) so all I see are more swings.
With low price right now production will drop and prices will go up. When prices go up production will increase and prices will drop. Rinse, repeat.
I predict $1.60 a gallon by July. My crystal ball gets fuzzy reception after that.
Exactly this – the more oil costs, the more there is of it. The less it costs, the less there is of it. It swings, but it also tends to self-correct back to somewhere in the middle over time.
I just structure my life such that it doesn’t really matter. I’d love $8/gal gas, I’d have fewer vehicular pachyderms in my way.
Not sure I agree with your $1.60 prediction though – I paid that in Dallas around New Years, but this week it was more like $2.30. $2.50 feels about right to me for this summer. But it is all a guessing game.
I predict that by 2020 no one will yet be able to correctly predict the price of gasoline five years out.
+1
If in 2010 you thought fuel would be $5 and above today, you should know better by now than to try and predict the price of fuel.
Just drive what you like, whether it’s a Prius or a deuce and a half.
This. If the average person could predict economic trends the average person would be much wealthier.
When I started driving in the mid 90’s, You could see through the rear window of the car ahead of you, out their windshield, through the rear window of the car in front of them, out their windshield, etc. I would pay $4.00 a gallon if it led to more people buying cars with sane heights again. Of course it wouldn’t bring back reasonably sized windows… and food prices would rise. I guess I’ll never get my visibility back unless I buy a bigger truck than everyone else. Anyhow, I think gas prices will be back up near $4 within a tear or two after the next Presidential election.
“When I started driving in the mid 90’s, You could see through the rear window of the car ahead of you, out their windshield”
A little young to be the angry old man, and anyways, you’re full of it, by the mid-90s the SUV thing was in full swing.
“When I started driving in the mid 90’s,You could see through the rear window of the car”
You had windows? Ha! Bunch of wussies
Windows? What are those?
>Windows? What are those?<
They are things which, on a proper vehicle, come off with the doors or the roof, and the front one of which, can be folded down.
SUVs were in full swing, but I don’t remember them having factory limo tint then.
There were Explorers, but there were not yet CUVs. Sedans were lower. Also, a lot of people were still driving cars from the 80’s. Truck beds were a lot lower too.
Oh, it will rise. Rising popularity particularly of big-engine German and American cars in countries like China makes sure that will happen.
No doubt it will rise but not because of lack of availability of oil. It will be artificially kept high, like it has been for decades.
With the overabundance of untapped oil, today’s price below $2/gal is realistic, but not profitable for Big Oil or the Treasuries.
We’re being played, suckers. The reality that lowered the price to what it is today was the sheer glut of oil available to us in the US.
“With the overabundance of untapped oil, today’s price below $2/gal is realistic, but not profitable for Big Oil or the Treasuries.
We’re being played, suckers.”
Err, no, that’s not how things work, we’re not being “played”. Would you expect Mars or Miller to crank out enough M&Ms or Miller Lite to make them so cheap and abundant that it was unprofitable for them to make it? No? Then why would you expect them to do the same thing for gas? If it costs me $1 to pump it out of the ground, I’m never going to sell it to you for $.90. Just ain’t gonna happen.
And as a result, people are losing their jobs because Big Oil is having to cut its expenses while having to sell the oil already extracted for less.
Dude, it’s happening right now in East NM, West TX, and several other drilling sites.
Doing more with fewer employees, in order to cut expenses.
Uh, yeah…I’m living it, as one of the laragest technology suppliers to refineries in the world. My dispute is not that it’s happening, my dispute is that what you characterize as nefarious “us being played” we call in the real world “market forces.” Big Oil is not “playing us”. If anything, OPEC is “playing” big oil, which is seeing a massive destruction of their profits.
Never fails, prices go up, people blame big oil. Prices go down, people blame big oil. In reality, big oil is the puppet, and it’s OPEC, Russia, Canada, and the US pulling the strings (with OPEC playing a much more active role than the other three).
I don’t blame Big Oil. I blame the politicians who use the low price of oil to exact ever more taxes from the masses.
We’re being played by the people we have elected to high office.
Whether we are being played or not, I decided to get out of the fuel casino business and went electric. My fuel costs are very predictable and haven’t shifted more than 10% one way or another for the last 3 1/2 years.
I’m hedging in two directions, one by moving MUCH closer to my work and my wife’s, so fuel prices are a negligible part of my budget (with a 5 mile commute gas would have to be $100/gal before I cared) and two by working in the industry and hoping to use the inevitable long-term rise in prices to pad my income and portfolio :)
My wife and I moved too but it wasn’t about concern for high fuel prices. The price of fuel doesn’t matter to us since we have to have it, no matter what it costs.
We moved because we wanted to live down the street from the Regional Medical Center in case we had a medical emergency. At our age, an inevitable event.
A friend of ours in his late sixties would have survived his medical episode had he not lived 26 miles from the nearest town and hospital.
By the time the ambulance got to his house 30 minutes after being called, he had been dead 20 minutes.
We still have our house in the desert but we will spend most of our time at our house in town, including sleeping there at night.
Everyone has an opinion but all of the data and information I have read suggests a lower, more “normal” oil price, for a longer period. Whether this translates into reasonable priced gasoline and diesel remains to be seen. If the politicriminals have their way you’ll be taxed to death on it.
I would gladly pay $1/gallon tax for world class roads. The ones I routinely use are cratered crap.
Regressive taxes for everyone, to subsidize the pampered middle class!
I know some rich and poor folks that drive on the same roads I do
Notgonnahappen.com
28, you’re right but the various governments (Fed, State and Local) will see this as an opportunity to tax the sh!t out of fuels, thus raising the price we consumers will have to pay.
I tanked up my truck today, $1.99/gal for Premium 91 octane. Bought 47 gallons because of all the gas I used moving into town. Filled up 4 5-gal gas containers too. Got change back from a $100 bill.
That hasn’t happened in a coon’s age!
It’ll be sooner than 2020 before we see massive fuel tax increases. Enjoy the low prices whiole you still can.
They’ll go to far and then when there is a genuine spike, everything will grind to a halt. Then the politicriminals will point fingers at each other while Rome burns (kinda like right now!)
28, New Mexico, an oil producing state, is seeing a serious shortfall of oil revenue because of the low price of oil, resulting in a staggering budget shortfall for 2015.
And since we as individuals, and as a real-estate management entity, own a number of properties, we cringe at the thought of even higher property taxes to make up these State, County, and Municipal shortfalls.
For instance, the tax on Cable and Satellite providers have increased a lot, starting 1 Jan 2015, as have all of our utility bills and property taxes.
In our case, we raised the rents on our rental properties (again this year) to offset the increases but those on fixed incomes or those actually working for a living will see their disposable income reduced by at least 6% because of increased taxes.
I predict by 2020 we’ll have bigger things to worry about then the price of gas
Oh man…do tell.
I’m putting together a backyard party in 2020…should I wait before putting together the details?
No, I think you should party like it’s 1999
That didn’t help. I was just starting out in the world after college and kinda had a lame 1999 party. You’re telling me to go back there in 2020 or is there something you’re not telling me? I’m much better off and can afford higher quality and volume of alcohol. Please provide more details why 2020 might suck.
” is there something you’re not telling me?”
Beware Y2K, life as we know it will cease to exist
>Please provide more details why 2020 might suck.<
1. Either Hillary Clinton or Jeb Bush will be elected to their second term.
2. Florida will be under water.
3. Either HC or JB will be explaining that the spring 2020 bailout of GM was the absolutely, positively, we really mean it, last time we will bail them out.
4. PCH101 will be found walking shoeless along the Pacific Coast Highway, muttering to himself, "It was a 363, you freaking idiots. This is NewNewNew Gm."
5. DW will stop to offer him a ride in his new Caddy, and PCH will run into the tide.
5. And worst of all: Wranglers will have raked windshields.
OMG all those things are horrible, see they were right about Y2K
Except you’re wrong about PCH, it’s worse, he votes for Jeb Bush
I predict that in 2020 we’ll look back, and everything that happened will be much clearer.
+1
This survey is a big ol’ case of http://i3.kym-cdn.com/photos/images/facebook/000/210/119/9b3.png
I know, right? Do they really pay people to make these predictions?
Surveys like this are conducted in order to produce press releases with some other ulterior motive.
A quick search will tell you that this was produced by a guy named Jack Gillis who writes annual editions of “The Car Book.” (I have to wonder whether anyone still bothers to buy that, but whatever.)
Putting a survey together doesn’t cost much, and the media is bound to pick up on it, since stories are always needed.
“The group then focused on how consumers would be affected at the pump between now and 2020 if they bought a vehicle that averaged either 18 mpg or 28 mpg, finding that those who opted for the lower average would pay $5,000 more for fuel over the period than those who desired more fuel economy.”
By my math that’s roughly $83 per month. How much that matters depends on individual circumstances, but I’d imagine that for most people buying a new car it’s probably not enough to drive major compromises.
If $83 a month is a critical expense for somebody then perhaps buying a new car is not a good idea.
Bingo. People are getting into CUVs and Pickups because they want them, and they feel economically secure enough to buy them and operate them in spite of potentially higher fuel costs which most people believe will return.
Would love to see this poll taken a year ago as to what fuel prices would be today. Even the “smart money” appeared to miss this plunge. I watch a lot of CNBC/FoxBiz/BloombergTV and don’t recall any pundits singing this tune even in midsummer 2014.
Cable business news is a great way to quickly learn about current events and to know what the pitchmen are pitching.
For understanding what will happen and why it will happen, not so much.
I predict that almost no one can predict anything of value.
How long has the demise of the gasoline engine been predicted? Did the Stanley Brothers of “Stanley Steamer” automobiles fame foresee that their companies time in the sun would be short lived? Would anyone in 1982 have predicted that in 2015 Ford would be a healthy company and GM would be on the backside of a bankruptcy?
I predict in 2020 that the oil market will be volatile (market-wise, not physical chemistry wise)
“the oil market will be volatile (market-wise, not physical chemistry wise)”
Really? Go smoke a cigarette while filling up your car
Someone got paid good money for this survey?
I’m in the wrong job.
Job Title: Survey Analyst
Job Requirements: Must be able to fall off a log and be able to post the results on the internet.
I could easily see it being over $5 a gallon in 2020.
If nothing else, the fact that every country is in a rush to devalue their currency in order to prop their economy up, eventually you’re going to start seeing real inflation across the board. I would argue you’re already seeing it in different places like food prices.
The cheap price now is from a single country purposely dumping their oil in the market at cheap prices to put competitors out of business. Eventually supply is going to tighten and prices will rise, I expect to see this just in the next 12 months.
And this is not even considering the idea of a black swan type event that could easily unfold with Russia or the Middle East.
“I could easily see it being over $5 a gallon in 2020.”
We were paying $4.75 for premium in Chicagoland (and that’s outside city limits) a year or two ago. At $3.90 I wouldn’t even blink.
All I know is that driving to work this morning I noticed it just went back over $3/gallon here (in CA). I think I can quite confidently predict I will pay over $4/gal well before 2020, but whether it is over that in 2020, I would not like to say.
That’s because of the blow up at the Torrance refinery.
In addition to the Torrance incident, the Martinez refinery is idle due to a strike immediately following a planned maintenance shutdown.
Torrance is probably down for a while. Some reports repeat Exxon’s “mechanical incident” line and ask no further questions, but the fluid catalytic cracking unit was basically destroyed.
When refineries are scheduled to go down for maintenance, they are scheduled in an orderly fashion, so as not to unduly disrupt the availability of fuels.
But when external forces like environmental activists help bring down a refinery, they do so with the intent and purpose to disrupt the availability of fuels, especially to the airline and trucking industries.
In the California area, the ELF has been particularly active in burning down Hummer dealerships, large apartment complexes, gas stations, taking pot shots at power transformers, etc.
The investigators do not publish what they know because they do not want to give the possible culprits publicity, recognition or fame.
I assumed $3.50/gallon when shopping for a car last summer and I feel reasonably confident in that assumption. At $3.50/gallon it made sense for me to buy a fairly efficient 4 cylinder engine car, but not a hybrid.
Oil prices high enough for gasoline to sell for more than $4.00/gallon provide a strong incentive to get more oil out of the ground, increasing supply, causing oil prices to fall. On the opposite side, the low oil prices associated with $2.00/gallon gasoline freeze new drilling in the expensive oil fields. $3.90/gallon in 2020 is plausible when you average in those areas with higher excise taxes.
2020? How about by the end of this year? I smell a conspiracy.
As George B up above notes, I assume $3.50/gal is the norm and just enjoy the reprieve for now. In my work, I can’t honestly say it affects my driving, as business trips are reimbursed. I don’t just run around town to do so, because Atlanta traffic takes the fun out of it.
The thing about oil prices, medical coverage, and a few other things, there is no fair market. Unlike having a choice in shopping for groceries at Walmart, Publix or the neighborhood 7-11, some guys living in relatively undeveloped countries have a monopoly on much of the oil supply. You can’t check online to see who has the best price on appendix removal, if you need it now. And in spite of what Obama has crammed through to get coverage for the “less fortunate”, it all ends of costing us all more, because we really don’t have a choice but to accept it. Oil prices have been that way forever.
I predict that by 2020 gas will be .07 bitcoins/gallon and the dollar won’t exist.
And on clear, sunny days, the sky will be light blue…
And Scott Walker will win a 2nd Presidential term…
And automotive news will be long out of business…
The Saudis are keeping production where it is (and using their $$$ reserves) to artificially lower the price in order to drive the Baakens (sp?) out of business.
When they decide to let things get back to “normal,” my guess is that the cost will spike to $5.50/gallon nationally in the space of a couple WEEKS!
That may not be the case. I saw one report that said that the Saudis know that with all the oil and natural gas development going on around the world that their ability to manipulate supply has been reduced so they’re embracing the idea of letting the market set the price. Low oil prices hurt Russia and Venezuela far more than Saudi Arabia, as well as Iran, no friends to the Sunni Saudies. Also, the cost of fracking has dropped and oil would probably have to drop below $40/barrel before the Baaken play is not profitable.
Whatever their motivation and strategy, the Saudi’s actions are intriguing.