Gas is getting cheaper!

Perception has a way of creating value in ways that, when honestly assessed, don’t make a lot of sense:

  • A latte costs $32 a gallon, on average
  • A gallon of Smoothie King (Gladiator) smoothie costs $27.16/gallon (not including tax)
  • A cup of regular coffee costs $16/gallon, on average
  • It’s about $2/glass for soda at a restaurant, an average of $12.80/gallon
  • A gallon of Aquafina water could cost you at least $13.50, on average

The above list consists of items that most American’s consume on a daily basis, without thinking twice.

Last Wednesday, the Energy Department announced that they anticipate that the cost of a gallon of gas would rise to an average of $3.60 this coming June; an increase of 82¢ a gallon since this time last year.

I am not a proponent of rising fuel costs, especially since I personally can’t figure out what’s really driving this bottom line increase. However, I would like to challenge the perception. Auto fuel, an absolutely essential tool of our world, is far less expensive than any of the aforementioned nonessentials. All of which we could do without, if and when necessary.

Marketing departments have done a fantastic job at creating a high perceived value in our minds for packaged products. It seems that Exxon, Chevron, BP and the like, could stand to do some of their own marketing to win consumers over to their undervalued product. Until then, we’ll continue to live in a culture that values a gallon of coffee more than a gallon of gas.

Marketing influences. Perception pays the bills.

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  • Kristy C

    How true! It’s all about what we value, and as gas prices go up, I guess some things that are everyday enjoyments will become more of a luxury.

  • Evelyn

    Wel stated by both of you. It is easier when we truly understand needs verses wants (luxury). And the older I get I realize meeting needs brings more satisfaction than chasing wants.

  • Andrew

    Inkjet ink is $3000 – $5000/gal.

  • Jim

    So – for the record, I thought I’d say this: My tin of Irish Breakfast costs $6.25, and makes roughly 50 5oz cups of tea. If memory serves, it would take 25.6 5oz cups to make a gallon…making my “Irish Breakfast Cost Per Gallon” $3.20. How about that – my tea is cheaper than gas.

  • will

    The main problem with you’re argument is that a tenth of a gallon of coffee will quench my thirst but a tenth of a gallon of gas will get me about 2 miles. I think it is more important to look at the value these goods serve not the size of their containers.

  • Colin

    More than just the marketing success of those packaged products, though, is the simple fact that you don’t usually buy any of those products by the gallon.

    You may buy a gallon (or litres) of juice or milk, but again that’s different than filling a 15-gallon tank.

    Spending a couple of dollars for a coffee feels like pocket change because, well, it is. But at the pump you shell out $40-50+ at a time, depending on the size of your tank. That’s easier to notice.

    Of course, that still serves your point: perception dictates reality. We just don’t notice a slow bleed of our money like a big spend.

  • Jared Goralnick

    very funny! Needless to say, gasoline is the only COMMODITY on those lists, since one could live perfectly fine without the other stuff (maybe have some cheap coffee if necessary but the others are complete non-necessities).

    Nonetheless the oil companies aren’t exactly marketing geniuses. With their budgets now they could enlist some though…