How to Cope with Rising Prices at the Pump

How to Cope with Rising Prices at the Pump

(Image: Thinkstock)
Bleeding money at the pump (Image: Thinkstock)

Lately, many of us have been treating trips to the gas station like dreaded visits to the dentist. Our heart palpitates as we pull closer to the pump in fear of what today’s price per gallon might be, knowing that it could be even higher than yesterday’s.

So where does this magical number come from? Between 50 to 70 percent of the price of a gallon of gasoline comes from the price of oil. As long as there are political tensions in the Middle East and North Africa, where more than one third of the world’s liquid fuels are produced, we can expect to see relatively high prices passed on to us at the pump. This also means we can expect to be burdened by added costs to expenses like home heating and cooling, food, and any other consumer goods or services that require transportation or some reliance on oil and gas. Many folks are once again scrambling to find ways to combat these costs, and President Obama has even considered tapping into our nation’s stockpile of oil in the Strategic Petroleum Reserve.

How will you adjust your everyday life to ease the tensions of these rising prices that may last for quite a while? Here are a few tips to get you through the ups and downs.

Factor-in rising costs

Look at the current price of oil–and gas at the pump–and try to factor-in future costs when making important decisions. For instance, if you are thinking about relocating or accepting a job that requires a commute, allow for a 15% increase in future transportation costs. Or if your work or business involves bidding on future jobs that include transportation, factor-in possible hikes or include clauses that will allow you to adjust pricing later so that you are not short-changed in the end.

Invest in alternative energy

The unrest in the Middle East and North Africa and the direct relation to higher energy prices in the US highlight the importance of reducing our dependency on foreign oil. As long as prices continue to climb, alternative energy ideas will remain at the forefront of energy discussions. This will open many doors for investments in alternative energy projects like wind and solar power, and could possibly provide a windfall for those who bet wisely.

Learn to live with it

Until we solve our country’s energy problems, we will always be subjected to the volatility of oil and gas prices. One way to curb some of this distress is to simply reduce our demand by learning to conserve energy. Carpooling, turning thermostats down, using more efficient appliances and all of the other cost-saving methods we revert to during high momentary price hikes should become permanent ways of life.