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Sunday, January 9, 2011

If Gas goes to $4/gallon...

If the price of gasoline rises to $4/gallon, which some predict by year's end, it will affect everyday people's lives in many ways including higher food prices and an overall increase in the cost of products and services to make up for the increased fuel expense.

Obviously the most direct way it would affect people is when they put gas into their car.  So, let's break down how much more $$ a person would be spending on gasoline in a 12 month period if the price was $4/gal v $3 dollars.  For this example, a person completely fills his/her tank (16 gallons) just one time a week (52 fill ups) in a calendar year...

$3/gal x 16 gal = $48 per fill-up x 52 weeks = $2,496

$4/gal x 16 gal = $64 per fill-up x 52 weeks = $3,328

$1 more in gas per gal for 12 months means extra $832 spent per driver

150million US motorists x $832 ea = $124.8 Billion more dollars to oil companies

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