Liquidity (Literally)

By Brad Zigler

We all, by now, should have apprehended the recent decline in the pump price of gasoline. In my neck of the woods, would you believe, petrol at $3.94 a gallon's considered a bargain. That only makes sense when you consider that just one month ago, folks in my burg were shelling out $4.21 a gallon (and a lot of epithets as well).

But how much have fuel prices really attenuated? I mean in practical terms. Is it cheaper to fill up at Shell or at Starbucks nowadays?

With a little inspiration from the zanies at Harvard's Institute of Improbable Research, I set out to the local grocery store to inventory the cost of other commonly purchased liquids.

This admittedly unscientific survey yielded some rather astonishing results, to wit:

Item	Price	Price per Gallon
Regular Gasoline	$3.94/ 1 gal.	$3.94
Coca-Cola, 12-pack	$5.99/ 144 fl. oz.	$5.32
Lucerne Whole Milk	$2.99/ 64 fl. oz.	$5.98
Perrier Mineral Water	$5.49/ 3 liters	$6.93
TreeTop Apple Juice	$4.19/ 64 fl. oz.	$8.38
Budweiser Beer, 6-pack	$6.49/ 72 fl. oz.	$11.54
Joy Dish Detergent	$2.99/ 30 fl. oz.	$11.78
Minute Maid Orange Juice	$5.99/ 64 fl. oz.	$11.98
Tide Liquid Detergent	$10.99/ 100 fl. oz.	$14.07
Heinz Ketchup	$2.69/ 24 fl. oz.	$14.35
Windex Window Cleaner	$3.99/ 32.5 fl. oz.	$15.71
Starbucks Frappuccino	$2.49/ 13.7 fl. oz.	$23.26
Red Bull Energy Drink	$2.89/ 12 fl. oz.	$30.83
Pert Plus Shampoo	$6.19/ 25.4 fl. oz.	$31.19
Listerine Mouthwash	$4.99/ 500 ml.	$37.78
A-1 Steak Sauce	$5.96/ 10 fl. oz.	$76.29
Vicks Nyquil	$6.49/ 10 fl. oz.	$83.07

Turns out, no matter what aisle I trudge down, the liquids on the shelf are all more expensive than the fuel dispensed outside. No matter how much you might detest the oil companies for ratcheting up gasoline prices, there are lots of other folk that probably deserve more opprobrium.

Think about this, Red Bull drinkers: Your afternoon energy boost costs you a 148-mile adventure in your Acura RL. And who'd have thought Vicks Nyquil carried the energy equivalence of a 334-mile sojourn in a Ford Explorer?

As for me, well, my college kid goes through A-1 Steak Sauce like it was ... well, heck. Like it was 329 miles of cruisin' in my pickup. Hey, kid ... we gotta talk.

Comments

[John C. Lee:]

this was on cnbc months ago

2008 Sep 02 08:15 PM

[MarvinMBA:]

There's something to be said by these price comparisons...were pay way too much at the grocery store. Looking for these prices to to come down...hope the public wakes up and stops buying expensive liquids. We need to each have our own cow for milk and beef..

2008 Sep 02 08:18 PM

[camquin:]

funny article but... I don't use 20 gallons of any of these liquids (ok fine, except for beer) a week except for gas. so really the comparison doesn't real hold any water.

2008 Sep 02 08:26 PM

[najdorf:]

camquin: Of course gas prices have more of an impact on consumers than milk prices due to greater per capita consumption of gasoline than of milk, but that's not the point of the article. You have a huge amount of control over how much gasoline you use, and using 20 gallons (which means ~600 miles of driving or an inefficient vehicle) is a product of a series of choices about where to live, where to work, and how to spend your free time. Also, most people still spend more at the grocery store than the gas station, so the comparison is valid if you look at a basket of grocery store goods.

The bottom-line here is that gas isn't all that expensive; you pay less for a gallon of a non-renewable moderately scarce commodity that has to be drilled out from deep in the earth and shipped halfway around the world than you do for a beverage that is made from renewable, common and locally-available inputs. This discrepancy suggests that in the long run gas might become significantly more expensive (as it becomes scarcer). Gas only seems expensive today because our society was built around the expectation of endless cheap gas (live in a 4000 sq. ft oil-heated house in New Hampshire and commute to Boston daily? Sure, sounds great! Spend 2 hours every day idling on the LA freeways? Where do I sign?!). As we adjust consumption in response to price signals, Americans will feel short-term pain but long-term benefits.

2008 Sep 02 10:09 PM

[Muzie:]

Great points, najdorf.

2008 Sep 02 11:33 PM

[Alan Young:]

80-90% of the costs of most of these items is packaging. If you could buy Red Bull from a pump, without the bottles, it would be cheap. WalMart is getting smart about demanding that its suppliers reduce packaging costs. Other retailers could, too.

2008 Sep 03 02:30 AM

[The Cynic:]

The point is valid. The price of gas is artificially low considering the process necessary to produce it. This is even more stark when compared, as you do, with other items. However, to moderate it a bit, one should compare it to the rate of usage. One isn't supposed to consume Nyquil at a comparable rate to gas! The other point made above by another contributer about choices is equally valid. One can choose to drive a hybrid car, or to buy the no name version of Nyquil, Heinz ketchup or whatever else. It's the new frugality! Cheers.

2008 Sep 03 11:14 AM

[ain't no fo...:]

Those numbers are specious, apples for oranges, and don't take into account the overall user experience. Bud is cheap, but you get a much better high from Listerine, so which provides the better user experience and, therefore, value?

Anybody know whether Nyquil has alcohol in it? I might want to test it against the other two.

2008 Sep 03 02:44 PM