By Conley Turner
As the events in the Middle East and North Africa unfold, consumers in the U.S. are feeling the consequences in the form of high gas prices. Regular unleaded gas prices have risen each consecutive day for the past few weeks to national average of about $3.51 per gallon, according to the American Automobile Association (AAA). In some parts of the country, such as California, the price is closer to $4.00 a gallon. The fact that transportation represents the second largest expenditure for the average household, finding ways to offset this is becoming a high priority. There are four things that consumers can consider doing in order to offset the impact of high fuel prices.
Aside from giving up the automobile altogether and bringing out the bicycle, the first consideration is reducing speed. Most models of vehicles on the road today operate most efficiently at speeds between 50 and 65 mph. This efficiency starts to deteriorate beyond the top of that range. According to the U.S. Department of Transportation, the average vehicle uses about 550 gallons of gas per year. With the price per gallon of gas high and poised to go even higher as the peak driving season approaches, any offset is worth taking into account. While driving below 50 mph does save fuel, the social consequences can be severe as other motorists may not respond favorably. Furthermore, there is the question of running afoul of the law in some jurisdictions for impeding the flow of traffic. A ticket for such an infraction defeats the whole purpose of the exercise.
The second consideration for consumers is adhering to a proper vehicle maintenance schedule. Failure to do this is no different than having poor insulation in one's home during the winter months. In fact, the financial consequences are comparable. By some estimates, a properly done tune up can significantly improve the gas mileage of a vehicle by an average of 5 percent. Added to this, keeping tires inflated at their recommended pressure is also a gas saver. Adhering to manufacturer guidelines in this category alone can translate into as much as a 3.5 percent improvement in gas mileage. Last but by no means least is the fact that using the grade of motor oil recommended by a vehicle's manufacturer can reduce fuel consumption by as much as 2 percent.
The third consideration for consumers is to fill the gas tank to its capacity each time they pump. It is more efficient to fill the tank up at one time than at sporadic intervals. The latter behavior translates into wasting gas on various trips to and from a filling station. Further, it is more efficient to refill the tank when it has been depleted to a quarter of its total capacity. Operating a vehicle with less than a quarter tank of gas adversely impacts the durability of the fuel pump and leads to expensive repairs.
The fourth consideration is to buy oil related stocks. The money is going to be spent regardless and as such, if a consumer was to have bought stock in a typical gas station company, such as Exxon Mobil Corporation (NYSE:XOM) or Hess Corporation (NYSE:HES) at the beginning of 2011, the gains thus far would certainly offset the cost of filling up the car. On a side note, Exxon is one of the best performing stocks year-to-date in the oil sector.
Consumers have scant control over the market forces that propel gas prices upward. It is against this backdrop that the implementation of some or all of these considerations can soften the blow of escalating prices.