A painful topic

It's $4.18 a gallon here or $1.61 Euro (about $2.40 US) a liter on the economy. It costs $72 to fill up my VW passat! It hurts my soul! If we were to fill up on the economy, we would pay over $130

 

We're at $3.87-$3.97. I try not to get too upset about it since there is no alternative to me driving. This summer Paul will have my car (to fit the girls) and I'll drive the Corolla, so we should save some there. Also, if Paul stays at his current school (cross your fingers!) we're talking about him riding his bike or getting a moped. The only problem there is that ENC gets upwards of 100 during August and he'd be nasty-smelly by the time he got to work...

 

Ours is $4.27.

 

I pay $1.22L so $4.61 a gallon. I drive a Hummer which is the biggest gas guzzler ever and it costs me $120-$140 to fill. I don't complain though because its what I chose to drive although I do die a little inside everytime I go to pay-LOL.

 

It was on the news last night that it was going up by 1.5 cents at midnight. I filled the van at 1.33/liter. I think I may be walking a lot with the boys this summer. They are perdicting it to reach 1.50 by the end of summer. I know in Montreal right now they are paying 1.51/liter which is completely ridiculous. I was planning on a rd trip to Montreal for Aug, but I may not go because of gas prices.

 

We're at $3.73 a gallon. Our gas prices have gone down a little in the past week.

I don't like it, but I don't feel like there's much I can do about. I either have to buy the gas or I have pay to have my kids ride the bus to school. We haven't been to visit my parents in 2 years (11-12 hour drive). Gas is still cheaper than plane tickets for 4. Swimming lessons are what we're going to be driving for the most this summer. But it's still cheaper for me to buy the gas to go to the lady the kids trust and know and have taken from for several years than to pay the local rate for our town. And grandma lives close to the lady, so we combine trips.

We ride our bikes to go to the park and the library. We ride to go to the post office. We do the Kids Bowl Free program where I pretty much only buy the gas and the bowling alley is really close. We have a pass to a local botanical garden that I got for 1/2 price on Groupon. So, once again, I only buy the gas to get there.

We're lucky in that we can afford the gas and it doesn't impact us much. I just don't like driving that much so I already try to minimize trips and combine errands and convince the kids that it's really not that far on their bikes.

Marissa

 

its $3.89 right now - was $3.97 a few days ago but as it gets closer to the weekend I expect it to go higher

Fortunately we only fill Tony's Caliber about every 2 weeks - he ONLY drives it to work and back...my Ford I have to fill weekly and it takes about $60 (Fusion Sport)...

 

$3.68 today, down ten cents from last week at this time.

 

Ranges between $4.21 to $4.60 /gallon for regular where I live in NY. Some places have started raising the price for credit card transactions too. I filled up my van last week and it cost $72, which hurt a lot since I had to drive a lot in the last couple of days and I will need to fill up again tomorrow I usually only need to fill up my van every other week since I live 4 miles from where I work.

 

We pay $4.39 on base here, but off base is about 10-20 cents more.

Our diesel truck takes over $130 to fill up and the dang pumps cuts off at $100, so we always have to do a second one.

Our jeep takes about $80 to fill up. It's my primary car, but has the worse gas mileage ever. It seriously gets 12mpg, but thankfully I hardly ever go anywhere. The truck gets about 22mpg and most of the time we go places all together once he's home from work and on weekends.

 

I have to ask. What makes $1.51/litre "ridiculous"? Surely if you would pay that then you are deriving sufficient benefit from it that it is not "ridiculous"?

I remember when I first lived in Canada one of the interesting things for me was that when I went to the petrol station the price of petrol was lower than the number of litres (x litres cost less than $x) whilst I was used to the opposite (x litres cost more than $x).

 

Adrian and Richard, why do you guys seem to like high gas prices? Why do you think gas prices should be higher?

 

I haven't paid too much attention at each fill-up but I only budget $100 per month for gas and don't go over! I do ride my bike for all my local errands (have a bike trailer for the kids) so that might help. High oil prices drive the industry my husband works in so I have a hard time complaining anyway.
I also agree with the point that gas prices need to go high enough to invoke change. It's really the only way I can see change ever happening.

 

Several reasons which include:

- Drivers do not pay for the costs they impose on others by driving (pollution, congestion, noise, health and safety, opportunity cost of the space used) and I think they should.
- Due to drivers not paying the full cost they impose, it makes it very difficult for alternatives (public transport, electric vehicles, etc.) to become economically viable. Although some of these options also impose costs on others (known as "negative externalities") they are not as high as conventional fuel cars.
- Drivers do not pay for the full costs of road construction or maintenance which means that most of these funds come out of general taxation.

These factors also have the effect of increasing demand for car travel which makes it all worse.

That said, what I really want to see is variable road user pricing. This means that instead of paying an annual road/vehicle tax and tax on every litre (or gallon) of fuel you buy, you pay different amounts per kilometre (or mile) depending on your car, when and where you drive. What this would mean is that those that live in areas where there is no alternative would pay less than they do now but those that live in places where there are alternatives would pay more. Those that choose to drive at peak times in areas with alternatives would pay much more than they do now. Those that drive more efficient vehicles will pay less than somebody that drives a car with average fuel efficiency and a lot less than somebody that drives a hummer.

The current system is simply not economically or socially efficient.

 

Canada has a GAS TAX which goes towards the maintenance of roads, PLUS HST which is roughly 8%. I dont think gas should go up 8 cents in 2 days, that to me is completely ridiculous. When the cost of a barrel of oil is in fact going down.

 

HST is applied to everything (and it is 13% in Ontario), not just petrol and the fuel tax would need to increase substantially to at least (but probably more than) 10 times what it is now to be high enough to compensate for the full costs imposed by driving.

 

There is more to the cost of fuel than the cost of a barrel of oil. In any case, the price of fuel does not need to be related to the cost of producing it. The cost of that fuel is part of the price but there is nothing stopping companies from charging the maximum they think they can get away with (within the constraints of demand and supply elasticities and competition). I would argue that oil companies' record profits show that they have been grossly underpricing fuel in the past (in fact I still think it is underpriced).

 

I hear what you're saying and it makes some sense- how would it be determined who pays what specifically? Choose a Prius driver in LA, a crossover driver in Greenville, NC (who?), and somewhere of your choosing. How would I be differentiated from my neighbor who drives the Z71? Maybe he has economic need for his truck?

I'm following you so far, I just need concrete examples and implementation to keep up.

 

I actually didn't realise that I did that until you pointed it out! Sorry for the confusion

 

I can't give you exact numbers but the way it would work is that there would be a base rate of $x per kilometre (or mile). There would then be factors for such things as the fuel type, fuel efficiency, vehicle mass (based heavier vehicles do more damage to roads) applied based on the vehicle you are driving. Then each road segment (possibly with a segment starting at one intersection and ending at the next one) would have factors based on availability of alternatives and other factors. Finally there would be factors based on time and day based on availability of alternatives at that time, the historic level of congestion at that time/day, etc. These factors could be anywhere from 0 (meaning you pay nothing although unlikely) to y (some number higher than 1, meaning you pay more than the base rate). Therefore each kilometre/mile you drive would be calculated like this:

cost per mile on a particular stretch of road = base rate + vehiclefactors(fuel type * fuel efficiency * vehicle mass) + roadfactors(availaltern * others) + temporalfactors(availofalterntime * congestion * etc.)

The total cost would be the sum of all your driving. For privacy reasons, these costs would likely be calculated on a device and sent only in aggregate format (totals). Your bill at the end of the month would probably look something similar to:

Miles: base rate * miles driven
fuel type: fueltype * miles driven
fuel efficiency: fueltype * miles driven

etc.

Total cost: $z
Average cost per mile: $w

That way, if you see a high number for congestion, you would know that you could reduce your expenses by reducing the amount of time you drive at on-peak times. Similarly, if you have a high cost for fuel type or fuel efficiency you could switch to a hybrid or electric vehicle.

The factors would be adjusted from time to time to take into account changes in the availability of alternatives, fuel efficiency of vehicles, availability of fuels, etc.

Everybody would pay the same rates for each of these factors regardless of economic necessity. However, those that by economic necessity need to drive at peak times would benefit by needing to spend less time stuck in congestion (since the roads would be priced such that drivers with alternatives are priced off the road at peak times). At the moment somebody that "needs" to drive a big vehicle gains all the benefits from owning that vehicle and imposes most of the costs on other road users and society as a whole. We don't allow companies to dump waste wherever they want at no cost even if they have an economic necessity to dump waste. Why shouldn't we apply the same policy to vehicles?

Existing fuel taxes, registration fees, annual vehicle taxes and so on would be eliminated (or substantially reduced) so you could end up paying more, the same or less than what you pay now.

 

The thing that makes no sense to me is that I can't see any reason why the gas mileage cars are getting isn't better. My DH drives a little '86 or 87 CRX that gets 46 miles/gal. That's considerably better than a lot of hybrid vehicles. Now it's a 2 seater, with no extra options. But still. That's an almost 25 year old car and they can't come up with small sedan now that gets twice that? Why not? I don't buy that it's not economically feasible. I have a friend at church who has an M.S. in an automotive specialty, and teaches at a local college. When he was finishing his degree, he came up with a transmission that would boost fuel economy on an average sized, gas-powered sedan to over 70 mpg. But when he tried to patent it and shop the design around, the government told him he couldn't. Seriously, it's a racket! And big oil, and auto makers and the gov't are all eye-ball deep in it!

 

Engines are more fuel efficient now than they were in 1986/87 but cars also have more powerful engines which negates the improvement in fuel efficiency. Demand in the past two decades has been for more powerful vehicles, not more fuel efficient vehicles and vehicle manufacturers cater for what the market demands (unless regulation make them do otherwise). Most of the legislation pertaining to engines has been in reducing pollutants/particulates not fuel efficiency.

 

Who would pay for the beauracracy of such a plan? I don't disagree with the premise, but there are major societal benefits from roads--to all citizens regardless of how much they drive. They spur economic development, new business, and job growth, all of which benefit all citizens in a region--much like schools benefit even those without children in them. I don't deny the downsides environmentally, and people should have to contribute to those. But the US is never going to be like Europe in mass public transit for a variety of reasons.

 

Great points.
My questions were how, financially, it would be implemented. So roads would be paid for by their users, but who pays for this program? And then, how is this tracked? With a vehicle tracking device?

 

Roads do have broader societal benefits and I don't dispute that. The fact is that transport costs are embedded in everything we buy so even in a pure user pays system, anybody that buys anything at all would be paying towards them. That said, I do think that the capital expenditures involved in building a new road (if it is justified by benefits to the whole economy) should be paid for through general tax revenue in the same way that airports and public transport infrastructure generally is. The ongoing maintenance and operating costs as well as the pollutants and other external costs should be paid for by those that use the road (and by definition receive most of the benefits). The current system doesn't even cover the maintenance costs.

The nice thng about a variable road user pricing scheme is that places which are less dense (and therefore less suited to public transport) would pay less on a per-km basis than those that live in highly urbanised areas (many parts of Europe). I wouldn't expect to see the same prices around the world.

The tracking would most likely be by GPS (plus probably some additional sensors). There are a number of ways to deal with the privacy implications of this including having the on-board device do all the calculations necessary and only the totals are sent to some centralised system for billing. The cost of the system would most likely be paid for by general taxation (at least initially).

Variable road use pricing was due to be implemented in The Netherlands next year but the plans have been dropped due to a change in government (for political reasons - the system was nearly ready from my understanding and it was financially and technically viable).

 

I should also mention that there are a few car insurance companies that offer insurance on a similar basis with your premium varying based on how much, when, where (and in one case I know of how) you drive.

 

I'm willing to concede that the manner of paying for the expense of the road systems you're suggesting seems more fair and equitable. But, I'm afraid maybe it's the stereotypical American in me, there is no way in heck that I want a government tracking device on my vehicle. I'm a law-abiding citizen, too. It's just too Brave New World for me.

 

I wouldn't want one either if it allowed governments to track where I went (and I think you will find that privacy concerns are stronger in Europe than in the United States). The solution (as I mentioned) is to have the device itself do the calculations so that only totals are transmitted in the same way that time-of-day electricity billing tells you how much you used and when but does not tell you what it was used for.

 

I am Canadian and I agree. I wouldnt want them tracking where I am driving.

As for gas prices, NS has control over their gas prices, so how does that work into your scheme of things TwinPeshi? For those, like myself, who is a single parent and on a fixed income, if gas becomes much higher, I am just going to be parking my van. I BARELY drive it, I don't even do 3000 kms over a 5 month period.

 

NS being Nova Scotia? Price controls never work and are not sustainable.

 

Adrian, what do you do for a living, if you don't mind me asking? It's not really relevant to this conversation except that you share a huge wealth of knowledge and views that are unique to me.

 

It may be relevant actually. I have mentioned it before in various threads.

At the moment I am a transport PhD student (road safety, not economics) and the head of the IT department at a market research company. I used to be an application developer and a systems analyst.

 

Ha! Totally relevant, then. I appreciate your perspective.

 

If it makes anyone feel better I'm currently paying £1.37GBP/litre. According to the conversions earlier in this thread that works out as about $8.45USD/US gallon.

 

I filled up today and it was $54 from fumes. I have a 40 litre tank.