pump, pump it up...

Well, gas has finally topped $4 a gallon here in Madison. I fell very fortunate to have easy and frequent access to public transport, as well as being in a very walkable city. My wife and I drive about 15K miles per year, and get around 27 MPG in our old Saturn. This means that if prices average $4 per gallon for a year, we will face a gas bill of around $2,222. This is an increase of around $833 over what our annual bill was when gas hovered at $2.50 per gallon. This increase is real and I have noticed it, but I can honestly say that I haven't exactly felt the pinch, yet.

I do see how some have felt it though. When I consider the absolute increase in dollar terms of, say a two car family that drives a total of 40K per year and gets 20 MPG. The total bill for that driving, with $4/gallon gas, is a staggering $8,000 per year. This equates to a $3,000 increase from what the annual bill would have been when gas was at $2.50.

Taking this a step further, if you consider these absolute increases in comparision to median US income of $48K we are talking about 6% of the income going up in fumes. Or, even applying this to a family whose income is $75K, we see 4% gone. That my friends, is kind of staggering when applied to the populace en masse.