Gas Prices & The Implausibility of Everything

The price of oil, that curiously viscous substance we dig out of the Earth and then set alight to propel ourselves around in metal boxes (a process that, when considered rationally, is astonishingly inefficient), has recently decided to engage in a bit of a wobble. Over the weekend of March 7-8, Brent crude – the international standard, and arguably the most overvalued benchmark since someone decided seashells were currency – spiked to $120 a barrel. It’s since retreated somewhat, settling around $86, which, in the grand scheme of things, is still quite a lot of money for something that used to be dinosaurs. (The dinosaurs, incidentally, had a remarkably sensible transportation policy. They just… walked.)

This, naturally, has trickled down to the gasoline pump. The national average is now hovering around $3.54 a gallon, a jump of $0.62 in a month. Twenty-one percent. It’s a figure that feels… significant. (Although, when you consider the sheer, unquantifiable improbability of existence, even a 21% increase in the price of fuel feels rather… modest.)

What does this mean for investors? Let’s attempt to untangle this particular knot of economic causality. It’s a bit like trying to explain the rules of cricket to someone from another dimension – technically possible, but profoundly frustrating.

The Consumer & The Subtle Art of Being Taxed

Higher gas prices are, in essence, a tax on consumers. A rather indirect, slightly volatile, and universally resented tax, but a tax nonetheless. Consider the Ford F-150, America’s best-selling vehicle. It holds 36 gallons. An extra $0.62 per gallon translates to over $22 per fill-up. (Which, when you think about it, is approximately the cost of a moderately decent telescope. One could, theoretically, use that telescope to contemplate the insignificance of fuel prices in the face of cosmic indifference.)

For many, this isn’t a trivial sum. It nibbles away at disposable income, diverting funds from other, potentially more fulfilling, pursuits – like collecting antique thimbles or learning to play the ukulele. (The ukulele, incidentally, is a surprisingly versatile instrument. Though, admittedly, it rarely solves geopolitical crises.)

Gasoline still represents about 4% of most American’s spending. Lower than it used to be, thankfully, but still a noticeable dent. And it’s not just fuel. The cost of everything transported by truck – which, let’s face it, is pretty much everything – also goes up. Airline tickets, groceries, those novelty garden gnomes… all affected. (The gnomes, incidentally, are remarkably resilient to inflationary pressures.)

But beyond the purely economic, there’s the psychological factor. People don’t pore over economic reports. They look at gas station signs. They feel the price at the pump. (It’s a primal, visceral reaction. Like a squirrel spotting a particularly tempting nut. Or a politician spotting a photo opportunity.) A rising price fuels (pun intended) negativity about personal finances and the economy as a whole, leading to reduced spending and borrowing. And, of course, it contributes to overall inflation. (Inflation, incidentally, is a bit like a slow leak in the universe. Eventually, everything deflates.)

So, higher gas prices aren’t exactly a recipe for economic bliss. However, they are rather good news for shareholders of oil companies like ExxonMobil (XOM +1.29%) and Chevron (CVX +2.90%), both of which have seen their stock prices climb by over 20% this year. If the current geopolitical situation persists, and oil supplies remain constrained, these companies might be worth a closer look. (Though, of course, past performance is never a guarantee of future results. The universe has a peculiar sense of humor.)

2026-03-13 00:36

The Consumer & The Subtle Art of Being Taxed

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