# Cost of Living Math

Gas prices are reaching records, and I wanted to do a rather simple math exercise to see what that meant. I’m not going to go into why prices are as they are, that’s quite complex and perhaps another post.

• In my city, gas is \$1.85/L. In BC, there are spots at \$2.20.
• The average car has a 65L fuel tank, average truck is about 120L.
• To fill a tank in my city costs between \$120 to \$220. In BC, that’s \$145 to \$265.

Next up, minimum wage.

• In my city, minimum wage is \$15, in BC it’s \$15.20.
• A 7.5hr day that’s net \$112-\$114. Gross depends on taxes and a few other deductions. Let’s be super generous and say it’s 10% tax, so ~\$100 in the pocket per day.
• A tank of gas costs between 1.2 and 2.6 days of work, at minimum wage.
• Find a better job is often the reply. A daycare worker makes \$16/hr, the people effectively responsible and raising children. Auto mechanics are at \$27/hr. Nurses are between \$33-47/hr. Teachers are about \$45/hr.

Depending on the work you do, transportation options are quite limited. So what’s an acceptable amount of time spent to fill a gas tank, at minimum wage?

• Half a day? You’d need to make ~\$35/hr for a car, \$70/hr for a truck.
• A few hours? We’re in the \$90-\$180/hr range due to tax brackets.

The median family income in Canada was \$62,000. For non-seniors, it was \$93,800. Assuming 5 days a week, 50 weeks of the year that comes to: \$248/d and \$375.2/d. That’s a massive amount of income heading towards fuel.

Fuel Economy

So let’s look at the ratings for a bit. Their discrete values are always optimistic, to the point of frankly absurd, but their relative values have meaning. Let’s use 20,000km per year as the baseline, with 55% city driving, and fuel at 1.85 for regular.

• Let’s say a 2021 Dodge Ram Classic. 11.9L/100km. That’s about \$4,400 in gas per year.
• Conventional SUV, like a Ford Escape, is 7.7L/100km, or \$2,849 per year. Nearly half of a pickup.
• A mid-size conventional sedan, like a Honda Civic is 7.1L/100km, or \$2,627 in gas per year. Nearly half the cost.

Hybrid vehicles next:

• A pickup, there are less options, like an EcoDiesel or a F-150 hybrid. Both run around 9.1L/100km, or \$3,640 per year. About 30% cheaper than conventional.
• An SUV, like a Highlander is 6.7L/100km, or \$2,479 per year. Not any real difference with a conventional.
• A mid-size, like a Toyota Camry is about 4.9L/100k, or \$1,813 per year. This one is practically half of a conventional.

Electric vehicles now.

• There are no electric trucks yet.
• SUVs are extremely limited.
• Mid-size cars have more options, though dominated by Tesla. The average annual cost is around \$600 per year – or the price of 3 full tanks of gas for a pickup.\

Again, these are very optimistic numbers. I’ve used a Dodge Ram. I can assure you, it has never hit 11.9L/100km… maybe 14L/100km on pure highway, with 17 as mixed use. That \$4,400 turns into \$6,285 pretty quick.

I get that hybrid and electric vehicles can cost more, and that plug-in stations in Canada are really only options in urban settings. But I’m also aware that a pickup truck runs \$60k, and cities are full of them that have never had a piece of lumber in the box. There are obvious choices and hard choices everywhere.

Personally, our 2013 Subaru Outback (tows + AWD) is at best 9.9L/100km and \$3,600 a year. It’s due for replacement. Wife and I had a chat in the summer and hybrid was the only viable way forward… likely a Toyota Highlander at 6.7L/100km and \$2,480 per year (32% cheaper). Recent prices have cemented that idea.

Certainly this is an opportunity to reflect on our energy dependencies and long term options. Perhaps this is the kick in the knees where our habits move towards renewables, and give us an actual change against global warming. It’s certainly an incentive for those who are able to work from home to NOT commute. And there’s going to be a price point where it simply does not make sense to drive at all.

## 7 thoughts on “Cost of Living Math”

1. Marathal says:

A woman I went to high school with is a cross country trucker. She posted a photo at the pump. 117 gallons of diesel for \$575. She will need to do that 5 times for a trip. That’s money out of her pocket, if costs continue she will make less than she earns to drive a trailer full of goods from the west coast to east. The cost is going to have to get passed along.

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• Or, if my guess is right, the product won’t sell. Which has even worse consequences. Bonkers.

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• Forgot to add that pump prices are based on WTI, and not local value. Even if the country was 100% oil independent, the price is based on the global value of a barrel. A supply issue across the globe would impact a local price.

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• Marathal says:

Exactly. I get that everyone here thinks opening up the pipelines and drilling permits will bring prices down. The oil and gas are still there, it’s just the costs to get it from the ground to the refinery. Taking a big chunk of the total supply off the table shouldn’t have resulted in doubling of the cost per barrel. A lot is driven by speculation. Once it is all over, I’m sure most countries will find ways to acquire Russian oil and gas, and prices will come back down, slowly. I’m just dreading a throwback to the odd even rationing days from when I grew up.

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2. Marathal says:

I get my gas from a wholesale club I belong to. As a member the price is about \$0.10 cents cheaper per gallon. If I use their Mastercard I save an additional \$0.10. Not too bad. On top of that they have some items in the store marked with a gas nozzle that can get you an additional \$0.10 per item purchased. I usually end up with 2 things I need so I’m saving \$0.40 compared to other stations nearby. With gas climbing from other reasons months ago the lines were a bit longer than normal but not crazy. These past two weeks have been nuts. There were 50 cars in line last Thursday. Someone let a woman and her kids cross as they came out of the store with their cart, and someone cut in line. Ok, it happens, people can be jerks. As we got close to the pumps a guy in a pickup truck came zipping up through the parking lot and just pulled in ahead of the car in front of me. I thought for sure a fight was going to break out. Lots of F bombs between the two of them, the guy in the truck started to get out, so did the guy in front of me. Fortunately the truck guy got back in and pulled up to a different pump station. Not many younger people recall 2008 when prices were at this level, or back in the late 1970’s-80’s with fuel rationing. It’s not going to be pretty if gas gets above \$5 a gallon here, or if they start limiting how much you can buy.

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• I was a very young kid when rationing was about… I can only imagine how that would go in today’s gogogo/confrontation world. yeeesh

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• Marathal says:

In my area? I’m close to Philadelphia where they’ve already had close to 100 homicides this year, 561 last year, and shootings are occurring more than once a day? Yeah, it will be the Wild West. Last night I think they said 3 people opened fire on a man in a car, 31 shots, 19 hit him. Last week police shot a 12 year old after the kid shot at them. My wife and I don’t want to go out. It’s a crazy world.

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