Last year the average American household pumped $2,512 worth of petroleum products into their cars. That was actually about $115 lower per household than 2013 as plunging oil prices saved American drivers a whopping $14 billion at the pump in 2014. Even better, American drivers can expect to save even more at the pump in 2015 as long as the price of oil stays around its current level. Let's take a closer look at what the average American household pays at the pump and why the gas expenditures of so many Americans is, unfortunately, higher than average.
A moving targetDespite the relief at the pump in the past year, the average American household still spends more at the pump each year than we did at the dawn of the new millennium. In fact, as we see in the following chart Americans spent nearly a thousand dollars more to fill their tanks last year than we did just a decade ago.
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Source: U.S. Energy Information Administration.
A lot of this has to do with the price of oil, which had been more than $100 per barrel for much of the past few years. As we can clearly see on this next chart, oil prices have a pretty direct correlation on the per gallon price of gasoline that we pay at the pump.
That being said, there are a few other factors that determine how much we actually spend at the pump over the course of a year.
Three reasons why you might be above average The state we live in has a pretty profound impact on what we pay at the pump. According to AAA, the cheapest gasoline was found in South Carolina where lucky drivers (myself included) paid an average of $3.10 for a gallon of gasoline in 2014. Meanwhile, residents of Hawaii paid dearly for a gallon of gas last year as it averaged $4.16 per gallon. Overall, residents in the five states with the cheapest gas, which included South Carolina, Missouri, Mississippi, Tennessee, and Arkansas, paid an average of $3.12 per gallon. While residents of the five states with the highest gas taxes and fees, which included Hawaii, Alaska, California, Connecticut, and New York, paid an average of $3.81 per gallon. This difference really impacts what Americans pay for gas over the course of a year.
There are two other big factors that determine what the average American household poured into their gas tank last year. The first factor is how many miles a family drove over the course of a year. As we see on the chart on the right, the average miles driven per capita is around 12,000 per year.
Source: Energy Information Administration.
As that chart shows, higher gas prices over the past few years have had a bit of an impact on how much we're driving each year as the average miles traveled per person is about 1,000 miles off of its peak of a decade ago. However, gasoline prices aren't the only thing impacting this trend as demographic shifts have caused many Americans to stop driving as much as they had in the past. Meanwhile, a rise in telecommuting has many Americans disappearing from the daily commute. That said, those who drive more miles obviously spent more money than average at the pump.
The other factor that is causing many American families to pay more at the pump is the age of the car we drive. According to the EPA, the average fuel economy for new cars and trucks was expected to top 24.2 miles per gallon, or MPG, in 2014. That's expected to be about 0.1 MPG higher than 2013 and just over 5 MPG better than it was a decade ago. However, many Americans drive older cars. In fact, the average vehicle age is about 11.4 years according to recent data from IHS Automotive, so most Americans are paying more for gasoline over the course of a year than they would if they were driving a newer vehicle that got better gas mileage.
Key takeawayWhile the average American spent just over $2,500 to put gas and oil in their cars last year, many Americans spent more. Those living in a state with high gas taxes and fees paid substantially more than average, especially if they drove more miles than average and own an older vehicle. That said, the good news is that we all should see our gas bills drop in 2015 thanks to lower oil prices. Further, those that move to a state with low gas taxes, switch to a job closer to home, or buy a new car, could see their gas bills drop even further this year as each factor plays a key role in reducing the amount of money you pour into your gas tank each year.
The article The Average American Pays This Much at the Pump -- How Do You Compare? originally appeared on Fool.com.
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