A lot of Americans will be getting a $600 rebate check from the government sometime this summer to “stimulate the economy”. However, you may want to put off buying that BlueRay player for a bit longer because you are going to need that money to help the government subsidize the oil companies.
The price of gas in America goes through cycles that are driven by supply and demand, global events, inflation, greed, and other not-so-tangible factors. The prices start to ramp up starting in February, plateau in May, start to drop in August, and return to normal in November. See the graph below (taken from GasBuddy).

2007 followed the same initial growth trend, but its plateau never dropped back to normal. But let’s use 2006 trend for this back-of-the-envelope calculation, though, because it is more conservative. Also, we will assume the starting gas prices for 2007 are, in fact, “normal”. They aren’t, but, again, we will make that assumption to avoid unnecessary exaggeration. (Note: other years have differently shaped trends but the answer seems to come out the same)
I won’t bore you with the math - the derivation is left as an exercise for the student
- but if gas is destined to rise x dollars a gallon at this year’s plateau, then you will pay an average of 0.69x dollars per gallon extra from now until November 1. For example, if gas shoots up to $4.25 per gallon (like some are saying) from where it was in mid-February at $3.00, the end result is the same as paying $3.86 per gallon for the next 34 weeks.
Let’s assume you fill up your tank once a week and it takes 15 gallons to do so. On average, at $4.25 per gallon it’s going to cost you an extra $12.90 each time you go to the pump. By the time November has rolled around, you will have paid an extra $438 in gas. This is 73% of your Stimulus Check.
Admittedly, hitting the $4.25 average above might be too high. Then again, the calculation relies on the prices dropping back to normal by November - they might not if they follow 2007’s trend. So here is a little table to show you how much of your Stimulus Check will be, quite literally, burned up at various national averages.
Assumptions:
Average National Gas Price Mid-Feb: $3.00
Gallons Used Per Week: 15
Plateau % Check Burned
$3.20 11.7
$3.40 23.5
$3.60 35.2
$3.80 46.9
$4.00 58.7
$4.20 70.4
$4.40 82.1
Of course, if you start with a lower “normal” price or burn through more than 15 gallons a week, then these numbers get worse. A lot worse.
So, what’s the punchline, here? It’s this: The stimulus package is $152 billion. If gas hits $4.00 a gallon (like a lot of folks are saying) this is the same as the government writing a 89 billion dollar check to the oil companies. For comparison, Exxon Mobil posted a 39.5 billion dollar profit in 2007.
Remember, folks: Torches in the left hand, pitchforks in the right. It’s called organizing a mob for a reason, people. Let’s not look sloppy out there.