Survey: Consumers Expect Fuel Prices To Rise To $3.90/Gal By 2020
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.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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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!