Wikinvest Wire

Four dollar gas across the country

Monday, June 09, 2008

Now that gasoline prices have reached the $4 mark , there are new assessments as to what the impact will be for people in different parts of the country. According to this report in the NY Times, $4 gas is hitting rural areas the hardest.

Click to enlarge

If you look at the interactive graphic for gasoline as a percent of income (above) versus the one for gas prices themselves, it's clear to see just how big a factor median incomes, vehicle mileage, and driving distances are when assessing the impact of higher transportation costs.
“This crisis really impacts those who are at the economic margins of society, mostly in the rural areas and particularly parts of the Southeast,” said Fred Rozell, retail pricing director at the Oil Price Information Service, a fuel analysis firm. “These are people who have to decide between food and transportation.”

A survey by Mr. Rozell’s firm late last month found that the gasoline crisis is taking the highest toll, as a percentage of income, on people in rural areas of the South, New Mexico, Montana, Wyoming and North and South Dakota.

With the exception of rural Maine, the Northeast appears least affected by gasoline prices because people there make more money and drive shorter distances, or they take a bus or train to work.

But across Mississippi and the rural South, little public transit is available and people have no choice but to drive to work. Since jobs are scarce, commutes are frequently 20 miles or more. Many of the vehicles on the roads here are old rundown trucks, some getting 10 or fewer miles to the gallon.
Back when the hurricanes of 2005 hit and gas prices soared, there were reports of problems at police departments in the Midwest being able to afford the gasoline required to perform their duties in responding to calls.

School districts had a tough time as well trying to figure out how they could keep the buses running - buses that travel long distance to pick up students.

Those situations are probably much worse today.

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The Inscrutable Chicken said...

So the comment I left here ( was not completely out of the ballpark.

Still, I've never been one to let the facts get in the way of a good story...

Keep up the good work Tim!

Tim said...

They say that you can get some great deals on gas-guzzling SUVs now and, if you don't do a lot of driving, the money you save on the purchase price could more than offset the higher fuel prices.

Greyhair said...

It's hard for me to work up much sympathy for rural drivers who have consistently backed conservatives .... the same conservatives that denied global warming and have done little to move us toward petroleum independence.

Vespucian said...

My corner station is at $4.43 here in the Bay Area!

Off topic:

Tim, why do you think gold is only at $900? With the dollar dropping the way it is shouldn't it be at more like $1,100+ right now? Are the central banks dumping the stuff? I find the current discrepancy between oil and gold odd. What's your view? Could you do a post on it?

Greyhair said...

Yep, same here in Santa Rosa CA.

Tim said...

Oil and gold - coming right up.

Mike said...

$4 gas? Not here in Dirty Jersey (NJ). I just filled up at $3.83 at a Shell station. Full Service too, I didn't even have to get out of my car.

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Anonymous said...

We choose (for environmental reasons) to not pump much of the oil we have.

To be independant we will need a combination of better conservation (especially lighter vehicles & CFLs), alternative energy sources and use of the restricted oil fields.

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