Digesting Gas Prices

by Sharie Derrickson

Because I am a journalist, I am supposed to know a lot of stuff. By stuff, I mean who is president of the United States, who Alan Greenspan is, where most of the continents are, and my own address. I know these, but often, people approach me and ask me questions that I have no answer to, like, “How many moons does Jupiter have?” or, “What is a cumulous cloud?” or, “What is this checks and balances thing?”

The most recent question posed to me was, “Sharie, why are gas and fuel prices so high?” And, being the investigative journalists that I could be if I really tried, I found out some quite interesting facts regarding rising gas and fuel prices.

First of all, it is important to know that gas and heating oil is made from stuff dinosaurs ate 180 million years ago and is why it is called fossil fuel. But, dinosaurs eventually became extinct because they could no longer afford heating oil or the gas to drive to Florida for the winter. Sad.

Anyway, I set off to try and find out all the factors that could effect how much we pay at the pumps or to heat our homes. I made a list of things I thought would contribute to the rising costs, and I consulted many top websites for information. Then, I was asked to try and understand stuff like consumer price indexes, gross domestic product, and onomatopoeia. I realized that the whole subject might be over my head and that maybe I should tackle the problem from a more basic angle, like, “Do we pay a lot for gas and fuel as compared to other countries?” The answer was not simple either. See, we pay a lot less than other countries, and a lot more than other countries, primarily, I think, because those countries had either more or fewer dinosaurs than we do. I am not sure. I decided that I needed to compare prices around the world. Here is an example:

In the Netherlands, which I think is somewhere near Holland, pays about $6.50 a gallon for gasoline, which has many Netherlanders running through the streets with torches. But, in the Netherlands, people make a bit more money than we do, partially because they have those cool windmills that attract all kinds of tourists, and they save money by wearing wooden shoes, which they could burn to heat their homes if they like. Pretty smart, those Netherlanders.

But the picture was still unclear. Comparing gasoline prices was just to complicate because there were too many variables, so I decided to make a scientific comparison to something we all understand – fast food. It seems there is a direct correlation between gas and fuel prices to Big Macs. Where would one get that kind of information, you might ask? Easy. The Union Bank of Switzerland did a study that showed if Big Macs were buying power, then how long we would have to work to buy a burger.

The Swiss are great number crunchers and did this study with Big Macs representing total buying power worldwide because, well, I have no idea. They may have been bored. You’ll have to ask them. Their phone number is +41 848 848 064. Open a Swiss bank account while you’re at it, if you have an extra suitcase of money laying around if you don’t need it to fill up your car.
Here is an example of Big Mac cost comparisons:

In the Netherlands, it would take working 73.4 minutes of work to earn enough money to buy a Big Mac (if Big Macs represented the cost of living.) In the United States, you would have to work about 75 minutes to buy the same Big Mac. And, since Big Macs and a gallon of gasoline costs almost the same in these two countries, we can safely say that it would take you about 75 minutes of work to buy a gallon of gas. In short, we have a lot in common with people from the Netherlands, except for the windmills and the wooden shoes.

However, let’s look at Venezuela where they pay less than 25 cents a gallon. Yes, that’s right – less than a quarter for a gallon of gasoline. You may be saying to yourself right now, “Hold the lettuce. Why are we in such a pickle? I don’t relish the idea of paying so much more for gas than the Venezuelans. I don’t even now where Venezuela is.” (Funny Big Mac references, huh.)

Let me explain. Venezuelans have not only more dead dinosaurs, but also more refineries – probably because they have fewer caribou and spotted owls. In fact, their refineries are tourist attractions, and I understand they are thinking about opening a theme park later this year. And, I heard a rumor that they may put, “Come to Venezuela – we’ve got gas,” on their promotional brochure.

But, don’t be too envious of the Venezuelans. They have their fair share of problems, such as having a name that is hard to spell, and the fact that, in comparison, they pay way more for a Big Mac than we do. Here’s what it “broils” down to. (That’s another funny Big Mac reference, by the way.)

While the Venezuelans pay less than a quarter for a gallon of gasoline, they pay a whopping $1.83 for a Big Mac, and that dollar adjusted for stuff like cost of living, would make it cost like way more. So to a Venezuelan, gas is cheap, and a Big Mac is expensive. But, in all fairness, it would only take a Venezuelan about 20 minutes of work to earn enough money to buy a Big Mac, so I guess they get paid pretty well.

This takes me back to the Swiss, who have to work the hardest to buy a Big Mac – more than 100 minutes – AND they pay almost $5 a gallon for gasoline, and close to the same for a Big Mac. Man, I do feel sorry for them since that would be a little hard for me to swallow (another funny Big Mac reference, although in retrospect, it wasn’t that funny.)
Now you know that we don’t pay as much as some for gas as others, and we can conclude that Big Macs taste good, no matter how much they cost. We can also conclude that although Swiss people have good banks, but they pay too much for gas and burgers, and that I think Venezuela should rethink its travel brochure theme.

So, why are gas prices so high? I have no clue. It has something to do with dependence of foreign oil, output, oil demand in Asia, and a bunch of hubbidy-bub on charts and graphs that I didn’t really understand because I am a journalist and not an economist. This I do know – I’m now hungry – and I’m cold. I’m going to Micky D’s. They, unlike me, can afford heat.

Note: This story has a margin of error of +/- 75 percent because I am not good with numbers like the Swiss.

© 2006 Sharie Derrickson. Previously printed in the Thousand Islands Sun.