Schadenfreude

I was at Costco this weekend, waiting in line for gas behind a Hummer. My God, what an ostentatious vehicle. I wondered why anyone would want something — beyond the tax deductiblity aspect. (Don’t get me started on this one…)

I was going to write a sarcastic top five list speculating on why people buy these things, but 5ives already beat me to it.

As I was waiting, I was trying to guess what his fill up would cost. The answer: $67.20. Holy schadenfreude, Batman! For comparison, my Subaru Impreza costs around $22.00 to fill up. I can usually get 1-2 weeks out of that, and, at less than half the mass, it’ll fit only one compact parking spot.
Okay, I couldn’t set up a tent inside. How often do you really need to do that?

A friend of mine has had a Toyota Prius for a year and seems to like it. I took a quick look at carsdirect.com and I noticed the Toyota Prius “target price” is $5,000 above, or 25% greater than MSRP.
Wow.

I have heard a lot of reasons for the uptick in gas prices.

Refining capacity is running at record highs — no suprise given all the Hummers and SUVs I see around here. Nobody wants refineries in their backyard. If you’ve ever been to Pasadena, southeast of Houston, you can smell/see/hear/taste/feel why.

I understand that there is also a switchover to new gasoline formulations, mandated by the EPA to happen June 1. The formulation problem is further compounded by states having different demands.

Finally, there’s the fear factor. One account is the entropy from speculation is adding about $8 a barrel to the price.

A barrel of oil is 55 gallons. About 60% of that, or 33 gallons, is turned into gasoline. With a gallon of gas selling for an national average of $2 (higher here :-(, that’s $66 a barrel, not including the whatever else they can make from it (plastics, pharmaceuticals, etcetera).