Getting Used to $4 a Gallon Gasoline in America

There has been much brou-ha-ha made about “demand destruction” in the gasoline market.

Demand for gasoline in the United States has declined in the last month as gasoline spiked over $4. The media announced that Americans were changing their behavior and cutting back on driving.

Basically- higher prices make people cut back.

But do they? Or will demand come back as Americans get “used to” the higher prices?

I filled up in the western surburbs of Chicago for $4.09 on Friday and thought, “wow- that’s pretty cheap.” The prior fill-up was at $4.32.

ha! ha!

What is cheap gas?

“Cheap” is now about $4.00 a gallon.

But I found even “cheaper” gas when I was in Southwest Michigan over the weekend. Usually, gas prices are at least equivalent to the Chicago area (outrageous, I know. The taxes must be high. I didn’t think taxes could be higher than DuPage and Cook Counties.)

However, prices were even “cheaper” than the $4.09 I filled up with a few days before. I actually got gas for $3.82 a gallon and thought, “wow- that’s really cheap.”

How pathetic is that?

If I’m like everyone else, it makes me think that Americans are “getting used to” the higher gas prices- psychologically- and when that happens it’s not a big stretch to think that prices could stay around that level and behaviors would return (driving for vacations, driving to work instead of taking the train etc.)

Fewer RVs

What I did notice driving around the highways of three Midwestern states this weekend (Illinois, Indiana and Michigan) is that there were a lot fewer vans and RVs out.

Usually, this time of the year, there are quite a few of the big campers and RVs. I saw only two. And, I do have to admit, I thought, “what are they thinking?” as I drove by. I can’t imagine what it costs to drive one of those even 100 miles.

Limited Charging for Gas

Another thing I found interesting was at one gas station in Michigan it had an announcement that due to some kind of regulations from Visa and Mastercard, you couldn’t “pay at the pump” for more than $50 worth of gasoline at one time.

For some cars, that’s not even half a tank.

I’ve never heard of this before. The announcement said it was the policy of Visa and Mastercard.

You COULD get more gas- but you had to close out the transaction and start it up again (basically- do it twice.)

What’s the point of that? More transaction fees for Visa and Mastercard (of course.) Strangest thing I’ve ever seen on a gasoline pump (and it was NOT a handwritten sign- it was a sticker on the pump and said “don’t blame us! It’s the card companies.”)

Anyone else ever heard of this? I’ve never seen such a “policy” here in the Chicago area or any other major city I’ve ever filled up in (San Jose, San Francisco, Washington DC.)

Things are getting very interesting out there.