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Tipping Point: Study finds buying habits would veer sharply if fuel prices surge

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Old 05-18-06, 06:25 AM
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Overclocker
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Default Tipping Point: Study finds buying habits would veer sharply if fuel prices surge


At $2.75 per gallon, we keep driving big utes like this Hummer H2.

Somewhere between today’s $2.75 or so per gallon and the potential $3.75-per-gallon gasoline up around the next bend, consumer buying habits take a dramatic turn. A CNW survey of changes in buying and driving habits at different fuel price points shows 48 percent of new-vehicle buyers say they will purchase a more fuel-efficient vehicle “immediately” if gas hits $3.75 per gallon.

An AutoVibes study from Harris Interactive and Kelley Blue Book confirms the findings in the chart below—that as fuel prices surge, buying habits veer sharply toward consideration of more fuel-efficient vehicles.



Out of a Barrel
With crude oil selling at more than $70 for a 42-gallon barrel, it’s good for the petroleum industry that it can extract even more in commercial products at the output end of the refinery—nearly 45 gallons according to the American Petroleum Institute’s 2004 figures.

Funny business? No, just “processing gain,” by which the lighter, less-dense fractions occupy more volume than does crude. Mass is conserved, just like they taught you in chemistry and physics class, but gallons measure volume, not mass—as when making popcorn or ice, the volume expands without changing the mass.


At $3.75 per gallon, consideration swings to owning fuel-efficient cars like the Toyota Prius hybrid.

There are trace amounts of additives used in processing; the volumes reported in our graphic are before detergents and octane enhancers such as lead, MTBE or ethanol. Note the industry has some flexibility—in winter months, for instance, refinery output tilts toward home heating oil, in summer toward gasoline for vacationers, but the percentage change is minor.



Finally, don’t rush to your calculators: Firstly, anything that doesn’t add up exactly is due to rounding of the numerous components; secondly, at $75/barrel, the proportions here work out to $1.66/gallon and diesel at $1.68. That’s the cost for the raw material before taxes (federal is 18.4 cents per gallon on gasoline, close to 24 cents on diesel, plus your state and local taxes), transportation costs, storage, those additives, etc. And before profit margins, of course.
Oil's Future
For more on the state of gas and oil in the world today, check out:

www.eia.doe.gov

http://api-ec.api.org/frontpage.cfm

www.gaspricewatch.com/usgastaxes.asp

Source: http://www.autoweek.com/apps/pbcs.dl...305180001/1024
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