What the Falling Price of Oil Means for Commuters
If you drive a car, you’ve definitely noticed that it’s gotten easier to fill up your gas tank in recent months.
According to GasBuddy, between December 2010 and November 2014, gasoline cost an average of $3 per gallon across the U.S. But due to a perfect storm of sorts, the price of gas continues to fall. And it appears drivers can look forward to riding that momentum through the end of the year and beyond.
Patrick Deehan, a petroleum analyst at GasBuddy, predicts we’ll see sub-$2-per-gallon gasoline by the New Year — at least in Iowa. Deehan went as far as saying the U.S. will enter a new era of low gas prices that should persist for at least a couple of years.
The Energy Information Administration reported that the U.S. has steadily increased its oil production since 2008. Now the country’s producing more oil than it has since at least 1983. For these reasons, Goldman Sachs analyst Michele Della Vigna suggests a barrel of crude could cost $50 by 2020, which is more or less how much it costs today (it closed near $111 in August 2008, according to Reuters).
There are many factors that influence the price of oil. But it appears as though the wheels are in motion, and commuters can expect reasonable prices at the pump for the foreseeable future.
Now what exactly does that mean?
Commuters Will Have More Money in Their Wallets
It doesn’t take a rocket scientist to figure out that commuters will have more money in their wallets as gas prices come down. Money can’t buy happiness, but it certainly makes some things easier. With more cash in their pockets, they’ll be able to enjoy meals out, travel, and attend events with much more frequency.
Commuting millennials who entered the workforce during the days of the $75 fill-up may even be able to save enough to finally afford a down payment on their first home.
Of course, commuters would have even more money in their wallets if they didn’t have to drive to work at all. According to the Census Bureau, 10.8 million Americans commute more than an hour each way to work every day. In addition to that group burning more fuel and having considerably less free time than their work-at-home peers, a study published in the American Journal of Preventive Medicine revealed that there’s also a much higher chance that such folks will suffer from poor health.
There Will Be More Cars on the Road
Basic economics tells us that more gas will be consumed the less expensive it gets. As it becomes cheaper to drive a car, more cars will be on the road. So while a commute might become more affordable, it will likely also take up more of your time.
There’s also a hidden side effect of lower gas prices: more traffic fatalities. According to research out of South Dakota State University, a $2 drop in the price of a gallon of gas could translate into 9,000 additional fatalities each year. Sure, the figure may sound like it was conjured by some alarmist conspiracy theorist. But common sense tells us that more drivers on the road increases the probability that accidents will occur.
As gas prices continue to drop, commuters would be wise to keep their eyes peeled, knowing that they’re driving on more congested roads with folks who might not have driven that much or even at all over the past couple of years.
The Benefits of Flexible Working
All things considered, it doesn’t seem as though employees who commute are going to be in the best frame of mind when they show up at work each morning. Sure, they’ll be spending less money at the pump — everyone likes that (except for nefarious oil barons). But their commutes will take longer, and they’ll be sharing the road with larger cars driven by measurably worse drivers. Which doesn’t exactly sound like the most enjoyable of experiences.
Studies show that employees who are able to work from home at least on an occasional basis are happier than their chained-to-the-desk peers. These employees reclaim a couple hours from their days thanks to not having to leave the house in the morning. The resulting happiness translates into longer hours worked — i.e., those who are able to work in their pajamas are willing to put in more hours for their companies. According to Harvard Business Review, businesses that embrace flexible working arrangements benefit from reduced costs and increased productivity.
Believe it or not, a 20-mile commute over the course of a decade can cost as much as $50,000, according to finance blogger Mr. Money Moustache. There are other costs to driving than simply gas. So while commuters will certainly like the temporary relief of lower gas prices, they may find the extra-congested roadways eat up more of their time and stress them out.
Since data suggests working at home can be beneficial to companies, there will eventually come a time when most knowledge workers get their jobs done mostly at home. Only time will tell how quickly that complete transformation will take place — but it’s already in motion.