A Little Perspective

Coyote Blog did a bit of charting on the impact of gas prices:

… I added a fourth piece of data to the analysis: the average passenger vehicle MPG by year, as reported at the BTS here. The MPG data set is spotty, and required some interpolation. Also, data since 2004 is missing, so I assumed 2004 MPG’s for more recent years (this is conservative, since the long-term trend would indicate fleet MPG’s probably improved since 2004).

From this data I was able to create what I think is a slightly improved analysis. The key for households is not how much it costs to buy 1000 gallons, but how much it costs to buy the gas required to drive their typical annual miles. Using 15,000 as an average driving miles per year per person, we get this result:

Now that’s rather encouraging but I have to say that high energy prices don’t end at the gas pump. The impact on food and home heating have equally proportionality I would assume.

But nonetheless, things aren’t as grim as they have been in the past.

HT Q&O

This entry was posted on Thursday, July 3rd, 2008 at 9:15 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed.