Gas Pains: Is Your Budget on Empty?

By Martin Brown

gas prices gas pumpThe rapid run-up of gas prices is tough on all Americans. For the single-minded woman, the bite at the pump might be the cruelest cut of all.

I wrote a blog entry on about the greedy hogs pushing oil prices over a hundred bucks. For those of you who don’t know, oil  has become the new darling of high risk speculators on the world’s commodities markets. Not too long ago oil futures were purchased by transportation business hedging against cost increases. Now it’s simply a speculator’s game.

And that is one significant reason why you’ll see the wild price spikes we’ve not seen previously in this market, with the exception of a major conflict outbreak anywhere in the world, but particularly in the Middle East.

The immediate supply pressure is actually reducing, which in time should start drawing prices downward,. ut with the wild price fluctuations we have seen recently, most of which were up, up and away, it’s difficult for any market analyst to say when this oil fever will break. Remember also that when you see many of these eye-popping profit statements from the big oil companies, Mobil/Exxon, Chevron, Shell, those margins are not coming from retail gas sales, the kind you and I make, but from the skyrocketing values of all the oil leases, wells, and drilling rights that they control.

For the driving consumer, however, the long term price prospects are reasonably grim.

Here in most parts of California you’re lucky to buy a gallon of gas for under $4.40, and prices well above the $4.50 mark hardly draw a second glance anymore. As for diesel anywhere across America, $5 plus prices are the norm.

What all this adds up to is one grand financial headache. This is particularly true for single women, who are parents, and live in one of thousands of suburban communities across the United States where mass transit options are view, and driving distances are long. Take the case of Melissa G. of Plano, Texas. This clean booming suburban community that in a decade has transformed itself from farmland to its ranking today as the ninth largest community in Texas, is filled with new housing that provided the answer to Melissa’s American dream in the year 2000. Melissa works as a radiation technologist at a downtown Dallas medical center.

In the Fall of 2005, Melissa purchased a new Toyota Sienna. On a good day her 6-cylinder van gets about 16 miles to the gallon. Most days are not good with the frequent traffic delays that plague the Dallas Fort Worth metroplex. Melissa’s home is approximately 23 miles from her job. A relatively straight shot up the North Central Expressway that takes 35 minutes without traffic but often an hour or more with afternoon traffic. For her needs she made a sensible choice buying the highly reliable Toyota Sienna.

What Melissa did not count on was the stranglehold $85 fill-ups every five days of her 20-gallon tank would put on her monthly household budget. Melissa’s husband left her and her two children, now ages 14 and 11 back in 2004. “My life was a struggle before gas prices went through the roof, now it has pushed us over the edge.”

Melissa’s oldest attends middle school, four miles from her home, the youngest is in an elementary school that’s two miles in the opposite direction. “I spend my mornings and late afternoons sitting in traffic first doing drop-offs and then doing pick-ups. The school bus is not an option because Melissa’s four-day work shift starts too early and ends too late for the school district’s bus service to be an option.

Afternoon pick-ups of her two boys from their different after school programs is often just a first stop. There’s soccer practice, school events, boy scouts, and more.

Melissa is in that van a lot and is grateful for her regular Fridays off, which are often used to catch up on shopping and other household errands. That van gets a lot of use, and it’s been very reliable. On the other hand fill-ups every five days means a $500 monthly fuel  bill.

To bridge the gap from what money she has on hand to what money she needs to make her fuel bills, Melissa relies on two credit cards that have a combined limit of $15,000. Melissa is quickly approaching that limit. “What I’m not putting into the gas tank, I’m paying on interest on my Visa and Discover cards,” she says.

This is an all too common story: women on a single income, doing their best to stay one step ahead of their debts, and now sinking under the weight of their monthly gas bill. As Melissa says, “This wasn’t easy when gas went over $2.00 a couple of years ago.
Now I think of when I put $42 into my tank as the good old days.”

As oil prices continue their climb upwards, there’s little hope for the thousands of women locked in the same budget battle as Melissa. “I was always a saver, never a big consumer,” she explains. “I’ve worked a steady job for fifteen years. I never imagined I’d be in a whole this deep.”

Melissa has thought about relocating back to Dallas where mass transit options are far more abundant. She dreams of selling her van, and freeing herself of its monthly fuel bill.

Problem is that her seven-year old home in Plano is worth $3,000 less than what she paid for it in 2000. So for now she’s sitting tight hoping for an upturn in the housing market  and a downturn in gas prices. Economists don’t hold out great hope for either scenario in the short term and hope for a better future.

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