It's very easy to lament the astronomical rise in gasoline prices in the wake of the Hurricane Katrina disaster. We all watched in dismay last year as prices crept to over $2 a gallon, then were staggered as they soared to over $3 by Labor Day of this year. However, there is a bright side to this meteoric rise in fuel prices - the fact the using Premium Unleaded fuel is now a bargain, relatively speaking.
It's hard to remember, but just a bit over 3 years ago, gas prices were at an all-time low corrected for inflation. Regular could be had as little as $1.10 a gallon, and Premium commanded $.20 cents per gallon more. At the time, that twenty cents looked huge! That's over an 18% increase. Let's do the math:
If you drive 15,000 miles a year and get 25MPG, that's 600 gallons of gas. At 2002 prices, that fuel cost $659.40 for regular and $779.40 for premium, an 18.2% increase of $120.
Fast forward to post-Katrina 2005. With a cost of, say, $3.10 per gallon for regular, those same 600 gallons of gas now cost you $1,859.40. Ouch! No wonder people seem to be driving more slowly (traffic jams notwithstanding), selling those behemoth SUVs, and seeking hybrids and other high-mileage cars.
Ah, but now consider premium fuel once again. The extra cost for premium continues to be $.20 at most stations I've seen, with some a little higher, $.25 or $.30 more. What does this mean to your bottom line? Well, if the "premium premium" is $.20, then your annual fuel cost goes up by only that same $120 to $1.979.40, or just a hair over 6%!
Obviously, if the premium price differential is different for you, if you drive more or less than 15,000 miles a year, or if your mileage is higher or lower than 25MPG, then you can easily adjust these calculations to suit your own situation. The point is that even as people are abandoning it, bumping up to premium fuel is, relatively speaking, not the same hit it was a few years ago. Does it matter that much if you spend $45 or $48 on a tank of gas? Not to me, if it means extracting as much performance as possible from my car.
I will leave a detailed analysis of the benefits of premium fuel to another time. The fact is that many manufacturers recommend or require premium, and now more than ever it may be false economy to ignore that advice.
Oh, and as they say, your mileage may vary.
It's hard to remember, but just a bit over 3 years ago, gas prices were at an all-time low corrected for inflation. Regular could be had as little as $1.10 a gallon, and Premium commanded $.20 cents per gallon more. At the time, that twenty cents looked huge! That's over an 18% increase. Let's do the math:
If you drive 15,000 miles a year and get 25MPG, that's 600 gallons of gas. At 2002 prices, that fuel cost $659.40 for regular and $779.40 for premium, an 18.2% increase of $120.
Fast forward to post-Katrina 2005. With a cost of, say, $3.10 per gallon for regular, those same 600 gallons of gas now cost you $1,859.40. Ouch! No wonder people seem to be driving more slowly (traffic jams notwithstanding), selling those behemoth SUVs, and seeking hybrids and other high-mileage cars.
Ah, but now consider premium fuel once again. The extra cost for premium continues to be $.20 at most stations I've seen, with some a little higher, $.25 or $.30 more. What does this mean to your bottom line? Well, if the "premium premium" is $.20, then your annual fuel cost goes up by only that same $120 to $1.979.40, or just a hair over 6%!
Obviously, if the premium price differential is different for you, if you drive more or less than 15,000 miles a year, or if your mileage is higher or lower than 25MPG, then you can easily adjust these calculations to suit your own situation. The point is that even as people are abandoning it, bumping up to premium fuel is, relatively speaking, not the same hit it was a few years ago. Does it matter that much if you spend $45 or $48 on a tank of gas? Not to me, if it means extracting as much performance as possible from my car.
I will leave a detailed analysis of the benefits of premium fuel to another time. The fact is that many manufacturers recommend or require premium, and now more than ever it may be false economy to ignore that advice.
Oh, and as they say, your mileage may vary.
