Have We Finally Hit Our Gas Price Tipping Point?

by The Happy Rock on July 7, 2008

I talked before about my tipping point for financial change and my tipping point for financial success, but it seems that the US as a nation has finally hit its tipping point at $4.00 a gallon.

To recap, a tipping point is “the level at which the momentum for change becomes unstoppable.[1]

chevron-four-dollar-gas-prices1.jpgHistorically, gas consumption patterns rarely changed despite price increases.  It seems though that the general population has finally resigned themselves to the fact that high gas prices are here to stay.  Things seem to be following the same pattern of the gas crisis in 1978-1980.  The Wall Street Journal is reporting that “with crude now fetching more than $130 a barrel, oil’s share of GDP is getting closer to the peak of 8.3% hit in 1980.” It was in 1979 that gas demand started to change.  By 1980 consumer auto purchases started shifting to more efficient foreign cars.  Current consumption patterns are slowing partly because we are finally moving away from SUV and trucks.  SUV and trucks still accounted for 47% of all auto sales, but that is down from their peak at 55% in just 2005.  Hopefully the pattern remains accurate and prices will retreat again like they did in the 1980’s.

What I really think is happening is that people finally became convinced that they need to deal with the high prices and they were finally willing to make some major changes like purchases smaller houses, cars, carpooling, less driving, biking, or getting more energy efficient.  All of those changes require more planning and lead time and have a larger inertia to overcome, so people weren’t willing change because they were waiting for prices to go back down.

Do you see habits changing? Have your habits changed?

*Source – Filling Point Of No Return

{ 7 comments… read them below or add one }

Susy July 8, 2008 at 9:44 am

We have been trying to reduce our gas + energy consumption for the past 5 years, not to save money, but to save the planet (every year we’ve reduced our driving miles by at least 15)%. It’s nice that since we’ve been doing it for so long it really makes a difference financially at this point in time.

We are still trying to find ways to drive less and make the most of the times that we do. This is especially important since we live 25 miles from the nearest grocery store, not making as many trips is saving us on gas and grocery costs (not to mention we’re eating healthier as well). We have been searching out more local sources for our food and we find it’s better for us and for the planet.

It’s too bad it takes something like this for people to make a change. You’d think making the world a better place for future generations would be motivation enough, I guess not, how selfish of us.


Pete @biblemoneymatters July 8, 2008 at 12:06 pm

To be honest, I don’t think I’ve made any huge changes because of the price of gas. I’ve been carpooling for a couple of years previous to the gas price spike – and while that makes a difference – I don’t see myself making any changes now beause of higher gas prices. I’ll probably be driving just as much now as I always have. Yes I’ll be paying a little more, but the increase hasn’t pinched us to the point where we’re hurting.

Of course, we’re debt free, so it may not affect us as much as it does some?


Double Eagle July 8, 2008 at 2:28 pm

The price of gas hasn’t altered my behavior yet. I haven’t consciously cut down on miles. I do take more notice when I fill up. I have a long commute so I’m always interested in fuel economy. I figure when I make my next vehicle purchase, I’ll pay a little more attention.

I may not have hit a personal tipping point, but society as a whole may have.

It’s not just about filling up at the pumps. High fuel costs affect virtually every facet of society. Food costs more to harvest and/or product. All goods cost more to transport.

The weak dollar enhances this pain here in the U.S., but indications are that high oil prices are here to stay. That means that while we as a society start the slow process of accepting alternative energy technologies and developing them, people will still have to make personal changes to help make ends meet in the short term. Vacation travel has been down this spring/summer. I expect that trend will continue as people choose to relax closer to home.


Scott July 8, 2008 at 4:35 pm

I don’t feel the gas prices since I work at home so I hardly drive anywhere. For most of the people though, especially commuters there must become a time shortly that the financial need would force them to work closer.



Polina July 9, 2008 at 9:06 am

High prices on fuel make the prices to all of the consumer products climb higher and it does effect my life. Food has become really expensive, rent has become higher, it seems to me that if it will go this way further, EVERYTHING will just go to hell:( It is very difficult for people who work, but I don’t even want to think how HARD it should be for people who are already old enough for work. Many old people are now afraid of dieing in poverty…


Gasvergleich October 20, 2008 at 12:51 pm


here in Germany the gas prices are rising for year. 4-6 month ago we had the highest gas prices of all time with 1,60 Euro / Liter. Now we are at 1,36 Euro / Liter, which is anyhow very high. I remember a few year ago we had just 1 Euro / Liter. I dont think that comes again. We need new ways…how is it with electrocars in the USA? I heared they already very popular.




The Happy Rock October 20, 2008 at 1:08 pm

Who knew that government didn’t have to step in to effect gas prices, all that needed to happen was the we(US) and the world stopped asking for so much gas. Basic supply and demand.

@Gavergleich – Everybody seems to love their hybrids, but it will be years and years before they are close to common place.


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