Wait on That SUV: Will Gas Prices Go Back Up?

cheap gas

We’re all well aware that gas prices are absurdly low. Filling up my Audi Q7 used to approach $100, and now I can comfortably fill up for under $50. Prices are well below $2.00 per gallon, which harkens back to the good times of nearly a decade ago.

Of course with cheap gas, American drivers seem to forget that prices were ever high. Check out this quote from CNN:

With fuel prices steadily dropping, SUV and crossover sales climbed 11.8% higher last year. Now, with gas below $2 a gallon at most U.S. gas stations, that trend is expected to continue.

Instead of being thrilled that gas is cheap and keeping fuel-efficient cars to make the savings even bigger, we go right back to our SUV addiction. You know what that’ll do? That’s right. Welcome back, $4 gas.

The former president of Shell, John Hofmeister, said,

Over the next several years, as demand growth approaches 100 million barrels a day and the industry production falls short, yes, I believe later this decade we’ll see $5 a gallon and possible shortages of fuel in some parts of the world.

Granted, Hofmeister didn’t foresee this huge drop in prices, and he could be way off in his $5 prediction, but being the former president of Shell gives him at least a little bit of credibility.

So what should we, as American drivers, do? My advice is simple: Hope for the best but expect the worst. We should enjoy these low prices and save as much money as we can, but expect that prices will rise again. We shouldn’t be surprised when they do.

Rather than racing to dealerships and buying the biggest SUVs we can, we should work to pay off our existing cars or trade them in for more fuel-efficient vehicles. In fact, since demand for electric cars is currently down, it’s a great time to invest.

Eventually, prices will go back up. We can either act surprised when they do, or we can make preparations so we’re ready when it happens.

What car will you buy to prepare for higher gas prices?

-tgriffith

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