Entry bubble New Gas Mileage Rates and Estimates

By: Jake | June 30, 2008 | Category: Money

Those of you who use your car for business purposes can rejoice a little bit. The Internal Revenue Service increased the optional standard mileage rates for the rest of the year because of rising gas prices.

For every business mile driven from July 1 to December 31, 2008 taxpayers can use the rate of 58.5 cents to calculate deductible costs, 8 cents more than the 50.5 than the first half of 2008. The IRS also increased the standard deductible rates for medical/moving purposes from 19 to 27 cents. The agency doesn't normally change rates midyear but decided it was necessary due to rising gas prices.Fuel Pump

This change means that federal government employees who use their own cars for government work may see an increase in their reimbursement rates since the U.S. General Services Administration announced they're reviewing privately owned vehicle reimbursement rates. UPDATE: On August 1, 2008 the new rate for federal employees will be 58.5 cents per mile.

It seems whenever I post about something related to gas prices I get a few comments about specific types of cars. So I thought I'd mention that 55 years ago today the first Chevrolet Corvette rolled off the assembly line in Flint, Michigan.

The Environmental Protection Agency recently adjusted automobile gasoline mile per gallon estimates to take into account idling and other driver habits to make them more realistic. Fueleconomy.gov applied these new estimates to every automobile manufactured since 1985.

I am curious how many miles per gallon of gasoline the 1955 Corvette got. By the new estimates a 1985 Corvette gets about 15 miles a gallon in the city and 20 on the highway. I bet the 1955 Corvette gets far less. Does anyone know?

| View Comments [6] | envelope E-mail This Entry | Tags: business_mileage   fuel   gas_mileage   jake   tax  

 

Entry bubble The Future of Automobile Fuel

By: Jake | June 02, 2008 | Category: Money

The Toyota Matrix I bought two weeks ago may be the last fully gasoline-powered car I ever buy. I believe this because gasoline prices are high, alternative fuels and cars are continually developing, and by the time I buy my next car (10 years—fingers crossed) there should be a lot more options than just gas-powered cars.

After my post about why gasoline prices are rising, a few of you wanted me to write about research on alternative fuel sources. The United States Department of Energy has a website devoted to alternative fuels and vehicles. These vehicles generally cost more than conventional vehicles, but are friendlier on the environment, come with federal tax incentives and generally use cheaper fuel (if you can find it).Hydrogen

Alternative fuels are not derived from petroleum. Most of the time they are made from renewable resources and produce less pollution than gas and diesel. Natural gas and propane are in this group along with ethanol, which is produced from corn. Bio-diesel and many emerging fuels are produced from vegetable oils and animal fats.

The most interesting and most controversial alternative fuel is H2 or hydrogen which can be produced from fossil fuels, nuclear energy, photobiology and other methods. The only runoff that hydrogen cars produce is water, so there is no impact on the environment. Fuel cell vehicles are powered by hydrogen but are currently not in mass production.

There are other alternative fuel and advanced vehicles in production, but they are a little pricier than your conventional fully gasoline-fueled car. You've probably seen hybrid cars around, which are a combination of electric and gasoline power and seem the be the most cost-effective for many people these days.

It's a changing time for automobile production, and it'll be interesting to see what we will be test driving in the coming years.

| View Comments [10] | envelope E-mail This Entry | Tags: alternative   biodiesel   ethanol   fuel   fuel cell   gas   hybrid   hydrogen   jake   natural   propane  

 

Entry bubble Why Are Gasoline Prices So High?

By: Jake | May 26, 2008 | Category: Money

My post last week about saving money on gas had many of you asking why the price of gasoline was so high. You weren't the only ones.

Congress brought executives from oil companies to Capitol Hill last week and asked them to explain the price hikes. Unfortunately, there weren't too many clear answers. I'm not an oil expert or economist, but in this post I'll try to shed light on why gasoline prices are high.EIA Gasoline Price Chart

The Energy Information Administration (EIA) of the Department of Energy (their job: to provide neutral data regarding energy in the U.S) says the cost of crude oil is the main contributor to the price of gasoline. Crude oil accounts for 70% of the price at the pump. According to the EIA, the spot price of West Texas Intermediate crude oil, which is the U.S. benchmark for light, sweet crude oil, has risen steadily from $101.54 per barrel on March 31 to a record high of $128.93 per barrel on May 20.

The main reason for crude oil's price increase is high worldwide demand. Countries like China (especially with the recent earthquake) have increased their imports of petroleum. Political events and conflicts in oil producing countries also affect the price. What's more interesting is that crude oil is traded worldwide in U.S. dollars and since the value of the dollar is declining, it causes the price of crude to go up.

In the EIA's "This Week in Petroleum" published May 21, they project prices will go up in June and will rise as long as the price of crude oil keeps increasing. The report adds that the usual Memorial Day and summer travel season increase in demand should be lower due to higher prices, but this will not have too much of an effect on price since millions will still travel. Policymakers have proposed lowering or repealing gas taxes, but it's not certain how much this would lower the price.

As long as the price of crude oil continues to rise, we'll be paying more for gasoline. Let's hope gasoline will never cost more than a gallon of beer or ketchup.

| View Comments [21] | envelope E-mail This Entry | Tags: economy   fuel   gas   gasoline   jake   oil   world  

 

Entry bubble Save Gas, Save Money

By: Jake | May 19, 2008 | Category: Money

fuel pumpNext Monday is Memorial Day so many of you will be traveling this weekend. Some will travel by train and plane, but most of you will hit the highway.

If you haven't been living in a secluded area that does not require fuel to live (say a well lit cave), you know that gasoline prices have gone up a lot. It's literally gotten to the point where service stations have to replace old gas meters because they were not built to charge more than a certain amount a gallon.

Let's accept the fact that there is not much you (or we here at Gov Gab) can do to get cheap gas besides researching which station sells the cheapest gas in any location. Once you have paid for your gas, however, there are things you can do to improve your gas mileage and there are things that people say to do (myths) that won't make a difference.

Premium fuel (unless your car requires premium), fuel additives, buying gas in the morning, and changing your air filter generally do not improve your car's fuel use. That information comes from a CNN article where Consumer Reports and Edmunds.com tested six common gas myths. The article did find that inflating your tires and using your air conditioner properly would conserve fuel, but make sure you read the article to see how to do it properly.

There are other effective ways to save fuel that were not mentioned in the article. The Federal Trade Commission offers some tips and Fueleconomy.gov suggests you keep your car tuned up, plan and combine trips and most importantly watch your driving habits. If you really wanted to save money on gas, you could buy or trade in for a more fuel efficient car.

Alright, I've been as thorough as possible but I don't think I've covered every way to save gas. Tell me what you do to conserve gas.

| View Comments [9] | envelope E-mail This Entry | Tags: economy   fuel   gas   gasoline