Fuel Prices - Realistically how much do you want to pay?

[Third Opinion]

I took 1994 as the year - as he's 34.

Yes you are completely right, average salary was about £13,700 (looked it up) and I am sure petrol was around 60p a litre. Today's salary is around £25k-26 and petrol around £1.25-£1.30 a litre.

As much as I hate the price of fuel I remember very high insurance costs in 1990, around £700-£900 pounds for an XR3i for a driver under 30. Plus cars are far more reliable now. So I have to say relative to 1990 motoring is indeed cheaper.

I hate the Government keeping it relative

 

[Nelson Santos]

If it goes £1.50+ i am going back to my bike.

The problem we just lay down and let them rake up the prices, no blocking petrol stations ect to warn to bring price down.

 

[Janesy B]

Don't believe the hype mate there are plenty of cheapys about on the forum it's just they don't get posted as much. Personally I've not spent more than a grand on a car in Decades, Each to there own & all that.

Their!

I've never owned 3 <1k cars. If you're going to drive something crap, it may was well be cheap to run and own

 

[Amp34]

How much do I want to pay? ...hmm well the lower the better eh, but in the interests of trying to be at least semi realistic about it, I think 60-70p a litre is 'fair' ...which incidentally is the price range you pay in Canada these days, at least around Calgary it is (which I believe to be on average, the most expensive city in Canada).

I know it'll never happen, but I think those prices are fair and I'm happy enough to pay them. The prices we pay now in the UK though are ...well, ouch.

You might of course say, what have Canadian fuel prices got to do with ours? ...well it's a per capita similarly wealthy country, with a similar economic setup and roughly half our population, which is a lot closer than the USA anyway.

I'm not interested in European fuel prices as they are too high aswell.

I can still afford to run a petrol car, but, I am starting to think twice now before ...using it without care, I don't like spending as much as I do on fuel, then again who does!

I was thinking about this (well more specifically the US/europe price differences) the other day and it's not as clear cut as that. There is a big difference between the UK and Canada (and the US), distance. For the vast majority in the UK popping to the post office is a 5-10 minute drive at max from our house, for those in Canada popping down the road can be a 40 minute drive.

When we add distance into the calculation the price difference becomes a bit more palatable. Popping to the shops may be 5 miles for us whereas for them it can easily be 20+ (for a relatively similar proportion of people) so they need to use 4x the amount of fuel to do the same things.

Yeah cities will always be the same but then most people don't live in cities.

 

[[TW]Fox]

I was thinking about this (well more specifically the US/europe price differences) the other day and it's not as clear cut as that. There is a big difference between the UK and Canada (and the US), distance. For the vast majority in the UK popping to the post office is a 5-10 minute drive at max from our house, for those in Canada popping down the road can be a 40 minute drive.

Thats not really the case is it, ISTR that the average mileage of a US driver isnt much bigger if at all than somebody in the UK. It's a myth that people drive for 40 minutes to go to the shop - it's true that there are more rural areas than there are over here but thats vastly cancelled out by just how huge the population centres are..

Yeah cities will always be the same but then most people don't live in cities.

Really?

82% of American people live in cities and suburbs. Pretty much the opposite of what you said!

This compares with 90% in the UK and 89% in that other country people seem obsessed with the idea that everyone does an hours drive for a pint of milk in - Australia.

 

[clv101]

So I have to say relative to 1990 motoring is indeed cheaper.

This is a key point to remember. The relative cost of motoring has fallen over the last couple of decades. Motoring has never been more affordable than now.

 

[Amp34]

It's not a myth in the slightest (from experience). Those that live outside cities and suburbs (what does that mean in this sense, small towns?) have to drive a lot further than those in the UK (and there is a larger percentage of those in the US). You also have driving from town to town and city to city, 12 hours here will get you pretty much one end of the country to the other, doesn't get you that far in the US (yes there are planes but I'm talking extremes and, limited admittedly, experience). That affects both those that go and see family as well as haulage (although there is the similar argument about the distances our food travels).

It all adds up, have fuel the same cost as in europe and you would probably soon find a large number of villages and even small towns becoming deserted as people couldn't afford to live in them.

 

[AceTK]

Perhaps you should rephrase the question.

How high does petrol have to get before you take to the streets in a riot?

 

[[TW]Fox]

It's not a myth in the slightest (from experience). Those that live outside cities and suburbs (what does that mean in this sense, small towns?) have to drive a lot further than those in the UK (and there is a larger percentage of those in the US). You also have driving from town to town and city to city, 12 hours here will get you pretty much one end of the country to the other, doesn't get you that far in the US (yes there are planes but I'm talking extremes and, limited admittedly, experience).

I have already provided figures to demonstrate that the overwhelming majority of people in the USA do not live in the middle of nowhere, 40 minutes from the nearest shop. They live in cities. Most of them also do not road trip across the entire country. Just like in places like Australia, travel between major population centres is usually air, not road.

Figures from the Federal Highway Administration tell us that the average mileage driven per year by American residents in 2003 was..

13,476 miles.

Blue Book, a US equivilent of Glass's Guide over here, counts average mileage for valuation purposes as 12k miles.

This is more or less exactly the same as the average mileage used here in the UK.

Do I need to continue providing figures that disprove your opinion that Americans drive much further than us, or are you happy yet?

 

[Amp34]

You misunderstand my first point, I meant there is a larger percentage of people in the US that live outside of urban areas (18% in the US to 10% here from your figures).

A large proportion of those will drive a lot further than those in the UK that live outside urban areas. I had a look at the figures as well and the UK is around 9-10k miles, that's 3/4 of what those in the US drive on average, quite a big difference.

You can also factor in that when converting $ price to £ price the average wage in the US, which is lower than the UK (around 1:1 $:£).

Either way my second point was that up to 18% of the US population probably pay more per trip to the shops etc. than those in the UK, with a large proportion of them doing the 40 minutes to a shop.

(Oh and as a very rough straw poll of those Americans I spent time with this summer, all but one drove too and from where we were working, most driving significant miles, ie the entire eastern seaboard. Yes most people fly cross continent but a lot dont).

 

[Fr0dders]

You misunderstand my first point, I meant there is a larger percentage of people in the US that live outside of urban areas (18% in the US to 10% here from your figures).

yet not enough to significantly increase the average mileage

so its a meaningless statistic.

 

[[TW]Fox]

You misunderstand my first point, I meant there is a larger percentage of people in the US that live outside of urban areas (18% in the US to 10% here from your figures).

That is a negligable increase.

A large proportion of those will drive a lot further than those in the UK that live outside urban areas. I had a look at the figures as well and the UK is around 9-10k miles, that's 3/4 of what those in the US drive on average, quite a big difference.

It would be if 9-10k really was average mileage in the UK but it's not - it's generally accepted that 10-12k is the average mileage in this country - its the reason why many new car warranties are 3 years/36k miles for example.

However even if you were right you are still trying to justify a fuel cost thats effectively 3 times the price based on an a small increase in annual mileage?

You can also factor in that when converting $ price to £ price the average wage in the US, which is lower than the UK (around 1:1 $:£).

I got a huge headache last time we went here - 1:1 $:£ is never an appropriate conversion rate for comparison.

(Oh and as a very rough straw poll of those Americans I spent time with this summer, all but one drove too and from where we were working, most driving significant miles, ie the entire eastern seaboard. Yes most people fly cross continent but a lot dont).

We got lost in the technicalities really but overall I still fail to see your point. It doesnt change the fact that in the UK, we pay an excessive amount of money for fuel.

 

[Amp34]

That is a negligable increase.

Not really, that still means 1/5th of people don't live in a town or city, which, with the distance out there is quite substantial.

It would be if 9-10k really was average mileage in the UK but it's not - it's generally accepted that 10-12k is the average mileage in this country - its the reason why many new car warranties are 3 years/36k miles for example.

However even if you were right you are still trying to justify a fuel cost thats effectively 3 times the price based on an a small increase in annual mileage?

Well all I have is google and that's what came up.

How is it 3 times the price? It works out at about 60p a litre depending on excange rate, so at max only double and as I pointed out a large proportion of those 18% will be travelling a lot of miles (excluding road freight).

I got a huge headache last time we went here - 1:1 $:£ is never an appropriate conversion rate for comparison.

Not sure what you mean by this but my point was that the average US salary is around $25k, whereas our average salay is around £24k, which in real cost of living terms means $1 over there is equivilent to the spending power of £1 over here. That means that needs to be taken into account when thinking about cost.

We got lost in the technicalities really but overall I still fail to see your point. It doesnt change the fact that in the UK, we pay an excessive amount of money for fuel.

My point is that although we in europe pay a lot for fuel the US and Canada don't really, in real terms (when mileage, eaning power and wages are accounted for), pay much less.

If you really want to see the excess we pay on fuel you want to look at the North African nations, although some of them subsidise fuel.

EDIT: One thing that always gets me when going over to the US is the fact that it really isn't that cheap. When the exchange rate was $2 to the pound it may have been different but at 1.7 and below once things like sales tax are added it really isn't.

 

[[TW]Fox]

Not really, that still means 1/5th of people don't live in a town or city, which, with the distance out there is quite substantial.

I still don't really understand what point you are making. So, because only a fifth of people there dont live in a city.. that relates to our fuel price how?

How is it 3 times the price? It works out at about 60p a litre depending on excange rate,

At the curent exchange rate a litre of unleaded gasoline is circa 49p.

so at max only double and as I pointed out a large proportion of those 18% will be travelling a lot of miles (excluding road freight)

Yet not enough of a proportion to significantly increase the annual average mileage per citizen, and not enough to change the fact that both the UK and the US car price guides use 12k miles for average..

Not sure what you mean by this but my point was that the average US salary is around $25k,

Except it isn't - in 2006 the median salary there was, according to the US Cencus Bureau, $32k, or $39k if we only count full time working adults. In 2007 the median salary in the UK (Median, not mean) was £19943.

Converted into dollars it almost exactly matches the current exchange rate, therefore the current £1:$1.6 is far, far more accurate than the £1:$1 you are using.

whereas our average salay is around £24k, which in real cost of living terms means $1 over there is equivilent to the spending power of £1 over here. That means that needs to be taken into account when thinking about cost.

It would need to be taken into account if it wasn't totally wrong?

If you really want to see the excess we pay on fuel you want to look at the North African nations, although some of them subsidise fuel.

Subsidised fuel doesn't really count so I won't count that.

EDIT: One thing that always gets me when going over to the US is the fact that it really isn't that cheap. When the exchange rate was $2 to the pound it may have been different but at 1.7 and below once things like sales tax are added it really isn't.

We disagree again then. It's pretty dangerous to judge affordability based on short trips but as you've brought it up I guess its fair game - I found almost everything to be noticeably cheaper, so much so I returned with a second suitcase filled with clothing I couldnt buy for twice that in the UK.

 

[Dangerous Dave]

its the reason why many new car warranties are 3 years/36k miles for example.

I agree with what you are saying overall but what new car warranties are 3 years/36k ? Most are unlimited miles for a period or around 60k.

 

[[TW]Fox]

I agree with what you are saying overall but what new car warranties are 3 years/36k ? Most are unlimited miles for a period or around 60k.

Maybe none these days but it definately used to be the case that Ford, Vauxhall et al were 3 years/36k

 

[Jay.D]

I think realistically we could afford £2 a litre in our household before it would impact us to the point where we'd be eating in all the time.
We do however drive a 1.4hdi so its not exactly luxury living!

 

[Moeks]

While I understand what you are trying to say Amp34, the fact is, as Fox pointed out, it really isn't as clear cut as that. And furthermore, what has any of it got to do with the price of fuel? ...what you seemed to be implying initially at least was that Americans drive say 20 miles to the shop ...thus lower fuel prices ease this ...we drive ...2-3 miles to the shop, so higher fuel prices are not as bad. Now for one thing this isn't true at all, but despite that ...why would that in any way shape or form justify 'considerably' higher fuel prices ? ...also, you might want to check out some GDP figures adjusted for purchasing power parity, if you compare the US, Canada, UK and Australia you will actually find the UK to be the lowest.

I have not seen this done on a wide enough scale to use as true data but my uncle has done it for himself, (he moved from the UK to Canada a couple of years ago), but I bet if you did it would match what he found. If you were to calculate the percentage of income spent on fuel per year, I bet the UK would be the highest, by some considerable margin. However, the fact that in the other 3 countries mentioned, especially North America, people tend to drive less efficient cars than in the UK, this will skew it back the other way to some extent I'm sure.

When all is said and done though, my point is really that we pay far too much for fuel in this country and there seems to be no justifiable reason for it, beyond greed by the government, I say the government more than the oil companies in this regard because something like 66-68% of the price of fuel at the pump is tax.

I say jack the tax on alcohol up to circa 70% to roughly compensate ...(please note that I am at least half joking here) ...might help with a few other issues too.