Just a little math.
Nearly 60% of the price of a gallon of gas is the cost of oil. (The percentage has been increasing.) At $138.54 a barrel (today’s closing price) the cost of crude is $3.30 a gallon (138.54 divided by 42 gallons per barrel).
Even if the price of oil gets to be two-thirds of the cost of gasoline, that still means $5 gas is very near.
Tom Friedman last week:
I was visiting my local Toyota dealer in Bethesda, Md., last week to trade in one hybrid car for another. There is now a two-month wait to buy a Prius, which gets close to 50 miles per gallon. The dealer told me I was lucky. My hybrid was going up in value every day, so I didn’t have to worry about waiting a while for my new car. But if it were not a hybrid, he said, he would deduct each day $200 from the trade-in price for every $1-a-barrel increase in the OPEC price of crude oil. When I saw the rows and rows of unsold S.U.V.’s parked in his lot, I understood why.
Crude oil was up $9 $10.75 a barrel today, so your SUV just lost $1800 $2150 in trade-in value.