Assignment:

Oil Prices
Submitted to:

Submitted by:

ROLL NO
271 B.COM
HONS SEC.
D (M)
Hailey College
of Commerce
University of the Punjab
Lahore.
 History of Oil
Petroleum, in one form or another, has been used since ancient times, and is now important
across society, including in economy, politics and technology. The rise in importance was mostly
due to the invention of the internal combustion engine, the rise in commercial aviation and the
increasing use of plastic.

More than 4000 years ago, according

to Herodotus and Diodorus Siculus, asphalt was used
in the construction of the walls and towers
of Babylon; there were oil pits near Ardericca (near
Babylon), and a pitch spring on Zacynthus. Great
quantities of it were found on the banks of the
riverIssus, one of the tributaries of the Euphrates.
Ancient Persian tablets indicate the medicinal and
lighting uses of petroleum in the upper levels of their society. By 347 CE, oil was produced from
bamboo-drilled wells in China.

In the 1850s, the process to distill kerosene from petroleum was invented by Ignacy
Łukasiewicz, providing a cheaper alternative to whale oil. The demand for the petroleum as a
fuel for lighting in North America and around the world quickly grew.[32] The world's first
commercial oil well was drilled in Poland in 1853. Oil exploration developed in many parts of
the world with the Russian Empire, particularly the Branobel company in Azerbaijan (Asia's first
modern borehole oil production began in 1848 at the Bibi-Heybat field near Baku), taking the
lead in production by the end of the 19th century. Oil exploration in North America during the
early 20th century later led to the U.S. becoming the leading producer by the mid 1900s. As
petroleum production in the U.S. peaked during the 1960s, however, the United States was
surpassed by Saudi Arabia and Russia.

Today, about 90% of vehicular fuel needs are met by oil. Petroleum also makes up 40% of total
energy consumption in the United States, but is responsible for only 2% of electricity generation.
Petroleum's worth as a portable, dense energy source powering the vast majority of vehicles and
as the base of many industrial chemicals makes it one of the world's most
important commodities.

The top three oil producing countries are Saudi Arabia, Russia, and the United States. About
80% of the world's readily accessible reserves are located in the Middle East, with 62.5% coming
from the Arab 5: Saudi Arabia, UAE, Iraq, Qatar and Kuwait. A large portion of the world's total
oil exists as unconventional sources, such as bitumen in Canada and Venezuela and oil shale.
While significant volumes of oil are extracted from oil sands, particularly in Canada, logistical
and technical hurdles remain, as oil extraction requires large amounts of heat and water, making
its net energy content quite low relative to conventional crude oil. Thus, Canada's oil sands are
not expected to provide more than a few million barrels per day in the foreseeable future.

The recently changes in the field of oil are as following:

2009 (Jan) - Gas exports to Europe greatly reduced as a dispute between Russia and Ukraine
causes a halt to gas exports through the Ukraine

2009 (Jan 19) - Oil price falls to $34 US per barrel

2009 (1Q) - Declining natural gas prices in North America cause significant cut in gas drilling in
both Canada and USA

2009 (June) - Khurais oilfield in Saudi Arabia brought onstream - largest single oil development
ever - expected production of 1.2MMBO, 315Mmcf/d Gas and 70mbbls NGLs per day

2009 (July 24) - California Government approves new offshore oil lease off Santa Barbara - see
1969

2009 (Sept 13) - Chevron announces plans to develop the Gorgon LNG Project at Barrow Island
offshore Australia

2009 (Oct 20) - Oil above US$80 per barrel - driven mainly by weakness in US dollar

2009 (Dec 7 - 20) - Climate change conference in Copenhagen, Denmark yielded very little
results

2009 (Dec 14) - Exxon-Mobil offer $30 billion to acquire XTO Energy Inc (a significant shale
gas exploiter in the United States)

2010

2010 (Jan 13) - Apache Canada Ltd. to acquire 51 percent of Kitimat LNG Inc.'s planned
liquefied natural gas (LNG) export terminal in British Columbia.

2010 (Feb 5) - Russia and Venezuela to jointly invest $20billion over 40 years to develop the
Junin 6 Field in the Orinoco Basin

2010 (Apr 15) - Eyjafjallajokull volcano in Iceland erupted - disrupting air travel in Europe and
across the Atlantic - problem lasted about one week.

2010 (Apr 20) - Deepwater Horizon rig explosion and fire while drilling BP’s Macondo
exploration well, in Gulf of Mexico, 11 workers killed and concern about a major environmental
catastrophe along the Gulf Coast
2010 (Apr 27) - Russia and Norway sign agreement resolving sovereignty of a portion of the
Barent's Sea that has been in dispute for more than 40 years. The area is believed to be highly
prospective for oil and gas exploration

2010 (June 3) - EOG blowout of gas well in the Marcellus trend in Pennsylvania - reporting
reflected some of the sensitivity around oil and gas activity following the BP blowout (see April
20)

2010 (June 16) - BP suspends dividend payments and sets aside $20Billion to cover damage
claims from the blowout in the Gulf of Mexico

2010 (July 15) - BP succeed in placing a cap to stop the leak on the Maconda exploration well in
the Gulf of Mexico. Subsequently, 4.9 Million barrels of oil estimated to have leaked from the
well

2010 (July 19) - Apache Corp to buy BP's Permain Basin, Egypt Western Desert and Canadian
Upstream assets for $7 Billion

2010 (July 26) - Rupture in Enbridge oil pipeline leaks 19,500bbls oil into the Kalamazoo River,
Michigan

2010 (Oct 10) - China National Oil Corp (CNOC) to spend $2.2Billion to acquire an interest in
the Eagle Ford Shale (liquids rich gas) in South Texas

2010 (Oct 11) - Statoil and Talisman Energy buy $1.8Billion to acquire interests in the Eagle
Ford Shale (liquids rich gas) in South Texas

2010 (Oct 12) - USA lifts ban on deep water drilling in the Gulf of Mexico

2010 (Nov 9) - Chevron Corp to buy Atlas Energy for US$4.3Billion to gain access to the
Marcellus Shale play

2010 (Nov 23) - Freeport LNG and MacQuarrie Bank plan to build LNG export facility in Texas
with a capacity of 1.4Bcf/d to be operational in 2015 at a cost of $2Billion

2011

2011 (Jan 16) - BP signs deal with Rosneft to jointly explore for oil and gas in the South Kara
Sea of the Russian Arctic

2011 (Jan - Apr) - Unrest in various countries of the Arab world creates concern over energy
supply and boosts oil prices

2011 (Feb 1) - Exxon-Mobil and partners report driling a horizontal well with a reach of
7.13miles (11425metres) to the Odoptu Field offshore Sakhalin Island. The actual measured
depth of the well was reported as 12,345metres.
2011 (Mar 11) - A 9.0 earthquake offshore Japan created a tsunami that caused considerable
damage to the Fukushima Nuclear plant 150 miles north of Tokyo - raising questions on the
viability and safety of nuclear power

2011 (Apr 19) - A blow out in a shale gas well owned by Chesapeake Energy in Bradford
County, north Pennsylvania ignites debate on the safety of hydraulic fracturing

Usage of Oil

Oil is being used in the world involving Pakistan in

following products.

Ink Dish washing liquids Paint brushes Telephones

Toys Unbreakable dishes Insecticides Antiseptics

Dolls Car sound insulation Fishing lures Deodorant

Tires Shaving cream Sweaters Linoleum

Tents Refrigerator linings Paint rollers Floor wax

Shoes Electrician's tape Plastic wood Model cars

Glue Roller-skate wheels Trash bags Soap dishes

Skis Permanent press clothes Hand lotion Clothesline

Dyes Soft contact lenses Shampoo Panty hose

Cameras Food preservatives Fishing rods Oil filters

Combs Transparent tape Anesthetics Upholstery

Dice Disposable diapers TV cabinets Cassettes

Mops Sports car bodies Salad bowls House paint

Purses Electric blankets Awnings Aspirin

Car battery cases Safety glass Hair curlers

Pajamas Synthetic rubber VCR tapes Eyeglasses

Pillows Vitamin capsules Movie film Ice chests

Candles Rubbing alcohol Loudspeakers Ice buckets

Boats Ice cube trays Credit cards Fertilizers

Crayons Insect repellent Water pipes Toilet seats

Caulking, Roofing shingles Fishing boots Life jackets

Balloons Shower curtains Garden hose Golf balls

Curtains Plywood adhesive Umbrellas, Cortisone

Beach umbrellas Artificial turf Heart valves LP records

Detergents Milk jugs Rubber cement, Sun glasses

Faucet washers Bandages Tool racks Vaporizers

Antihistamines, Cold cream Hair coloring Nail polish

Slacks Drinking cups Guitar strings False teeth

Yarn Petroleum jelly Toothpaste Golf bags

Roofing Tennis rackets Toothbrushes Perfume

Luggage Wire insulation Folding doors Shoe polish

Fan belts Ballpoint pens Shower doors Parachutes

Carpeting Artificial limbs Hearing aids

Wading pools Ammonia Dresses Lipstick

Motorcycle helmet
 Effect of petroleum on the quality of production supplied in
the market

The crude oil prices have shown a record rise in the last few months and has soared
tremendously leaving the oil importing countries to face its serious set backs. Crude oil prices
have jumped about $20 a barrel, or 60 percent, so
far this year. Oil prices closed at a record for the
third straight session on news of a strike
in Nigeriaand concerns over low winter heating fuel
supplies on Thursday, 7th of October. U..S. light
crude for November delivery briefly touched $53 a
barrel in early trading, and then fell back to settle at
$52.67 at the New York Mercantile Exchange, up
65 cents from Wednesday's record close.

This continuous rise in the price of crude oil is posing serious threats not only to the under
developed countries but on a global level. The experts are busy these days to analyze the after
effects of this massive oil price increase in their respective economies and are all finding that the
effects are going to be long lasting. David Robinson, the Deputy Research Director at the
International Monetary Fund, commented that tight oil supplies could leave the global economy
vulnerable for years to come. One of the intermediate and visible effects of this price rise is that
oil is taking money out of the pockets of consumers that could be spent elsewhere, increasing the
cost of doing business and the amount of foreign exchange dollars that need be funneled
overseas. Taking advantage from the situation, the speculators are pushing prices up on fears
about Iraq, Russia,Nigeria; and the thing is, those fears never materialized. Pakistan's economy
like all other world economies has started to sense the effects of this upward ride of oil lately.
First of all, a big rise in oil prices in the international markets has increased Pakistan's petroleum
import bill for July-August 2004 by more than 35 per cent, making it the largest component of
the country's overall import bill.. Data released by the Federal Bureau of Statistics show
thatPakistan had to pay around $639.2 million on imports of about 2.516 million tons of
petroleum crude and petroleum products during July-August 2004. In the same period last year,
the country had spent $472 million on import of about 2.267 million tons of petroleum crude and
its by-products. So, whereas the oil import bill rose by more than 35 per cent, the increase in
imported quantity was only 11 per cent. This indicates that record-high oil prices in July-August
in the international market have started taking their toll on Pakistan's import bill. On the other
hand, the federal government is also estimated to suffer a loss of around $1 billion by the end of
current fiscal due to rising world oil prices. This is mainly due to the fact that the federal
government does not want to shift this increasing effect on the general public and is therefore
absorbing $70 million to $80 million loss on a monthly basis. As a matter of fact, the total loss of
absorbing international oil prices is higher than the actualincome of the petroleum development
levy; the government wasreceiving from oil imports. According to the experts, the shift of this
oil price increase towards the general public will itself result in serious economic consequences
and will disturb the key economic indicators in 2004-05. According to them it will build a path
for general price rise resulting in an increase in inflation and further depreciation of the national
currency. This will ultimately give rise to growing concern of the international bodies if inflation
figure rise while the depreciation of rupee will make the imports costlier putting further pressure
on country's balance of payments and put extra burden on the rupee-denominated foreign debt.

The government is already facing a rising trade deficit which has expanded further to $839
million in July-September 2004, as compared to deficit of $788 million in July-August this year.
Only in September, the rupee has lost more than 1.9 per cent value against the dollar as the trade
deficit totaled $839 million. Senior bankers say the gap between trade-related inflow and outflow
of foreign exchange continues to widen during the current month, which suggests that the trade
deficit for October will be even higher and the rupee will weaken further unless the SBP supports
it. With oil prices going up and putting demand pressure in the inter bank market, rupee will
definitely depreciate which in turn would ultimately make overall imports expensive and widen
the trade deficit beyond $4 billion in this fiscal.

The rupee which is already under tremendous pressure mainly because of increased oil prices as
the importers are paying more in terms of their outstanding payments. Bankers said high
international crude prices also affected the interbank market payments as oil companies had to
pay around $7 to $8 per barrel more which has been one of the major reasons for rapid rupee's
fall in the inter bank market these days. According to an expert opinion, the dollar-rupee parity
could expand close to Rs 61 in case the government given up subsidy on the oil imports. The
official has further pointed out that the foreign exchange reserves of the country would also
remain under pressure mainly because of rising oil prices and import of wheat to meet the
shortfall.

With respect to inflation figure, the SBP has a very clear stance; it does not want to put pressure
on it while raising the domestic oil prices means rising general prices and thus the inflation. The
SBP has signaled that it may act aggressively to check the rising inflation every time by taking
certain measures. The State Bank signaled that it would not mind increasing the interest rates
aggressively if inflation continued to rise at an undesirably high pace. The central bank did so by
raising the weighted average yield on six-month treasury bills by 38 basis points to three per
cent. The central bank increased the average yield on the six-month paper from 2.62 per cent to
three per cent and managed to sell Rs1.1 billion worth of bills at this rate. The fact that this is the
biggest rise in T-bills rate after a long time and that it has been made to give a direction to the
market -- and not just to borrow funds -- makes it clear that the SBP is stepping up efforts to
check inflation.
 Alternatives of oil
The alternatives of oil which can be used in place of oil are as following.

BiofueBiofuels are also considered a renewable source. Although renewable energy is used
mostly to generate electricity, it is often assumed that some form of renewable energy or at least
it is used to create alternative fuels.

Biomass:
Biomass in the energy production
industry is living and recently dead
biological material which can be
used as fuel or for industrial
production.

Algae based fuels

Algae based biofuels have been hyped in the media as a potential panacea to our Crude Oil based
Transportation problems. Algae could yield more than 2000 gallons of fuel per acre per year of
production.[1] Algae based fuels are being successfully tested by the navy[2] Algae based
plastics show potential to reduce waste and the cost per pound of algae plastic is expected to be
cheaper than traditional plastic prices.

Alcohol fuel, Butanol fuel, Ethanol fuel, and Methanol fuel

Methanol and Ethanol fuel are typically primary sources of energy; they are convenient fuels for
storing and transporting energy. These alcohols can be used in "internal combustion engines as
alternative fuels", with butanol also having known advantages, such as being the only alcohol-
based motor fuel that can be transported readily by existing petroleum-product pipeline
networks, instead of only by tanker trucks and railroad cars

Ammonia
Ammonia can be used as fuel. A small machine can be set up to create the fuel and it is used
where it is made. Benefits of ammonia include, no more need for oil wars, zero emissions, and
distributed production reducing transport and related pollution.

Hydrogen
Hydrogen is an emissionless fuel. The byproduct of hydrogen burning is water, although some
NOx is produced when hydrogen is burned with air. Although hydrogen is a fuel it is not a
source of energy, as other types of power or fuels are required to produce it.

HCNG
HCNG (or H2CNG) is a mixture of compressed natural gas and 4-9 percent hydrogen by energy

Liquid nitrogen
Liquid nitrogen is another type of emissionless fuel.

Compressed air
The air engine is an emission-free piston engine using compressed air as fuel. Unlike hydrogen,
compressed air is about one-tenth as expensive as fossil oil, making it an economically attractive
alternative fuel.
Compressed natural gas
(CNG) is a cleaner burning alternative to conventional petroleum automobile fuels. The energy
efficiency is generally equal to that of gasoline engines, but lower compared with modern diesel
engines. CNG vehicles require a greater
amount of space for fuel storage than
conventional gasoline power vehicles
because CNG takes up more space for
each GGE (Gallon of Gas Equivalent).
Almost any existing gasoline car can be
turned into a bi-fuel (gasoline/CNG) car.
However, natural gas is a finite resource
like all fossil fuels, and production is
expected to peak gas soon after

Nuclear power
Nuclear power is any nuclear technology
designed to extract usable energy from
atomic nuclei via controlled nuclear
reactions. The only controlled method now practical uses nuclear fission (with a small fraction of
the power coming from subsequent radioactive decay). The attempt to use nuclear fusion for
control power generation is not yet practical but is an active area of research.

Nuclear power is used to heating a working fluid such as water, which is then used to create
steam pressure, which is converted into mechanical work for the purpose of generating electricity
or propulsion. Today, more than 15% of the world's electricity comes from nuclear power, over
150 nuclear-powered naval vessels have been built, and a few rockets that use radioisotope
generators (RTGs) have been produced
 Pakistan Oil and Gas Report 2011
Pakistan will account for 1.51% of Asia Pacific regional oil demand by 2015, while providing
0.73% of its supply. Regional oil use of 21.42mn barrels per day (b/d) in 2001 will reach an
estimated 27.11mn b/d in 2010, then rises to around 30.64mn b/d by 2015. Regional oil
production was around 8.35mn b/d in 2001, and will average an estimated 8.91mn b/d in 2010. It
is set to decrease slightly to 8.89mn b/d by 2015. Oil imports are growing rapidly, because
demand growth is outstripping the pace of supply expansion. In 2001, the region was importing
an average of 13.07mn b/d. This total will rise to
an estimated 18.20mn b/d in 2010, and is forecast
to reach 21.75mn b/d by 2015. The principal
importers will be China, Japan, India and South
Korea. By 2015 the only net exporter will be
Malaysia.

In terms of natural gas, in 2010 the region is

expected to consume 489bn cubic metres (bcm)
and demand of 633bcm is targeted for 2015.
Production of a forecast 412bcm in 2010 should
reach 548bcm in 2015, implying net imports rising
from around 77bcm to 84bcm. This is thanks to many Asian gas producers being major
exporters. Pakistan’s share of gas consumption in 2010 is an estimated 7.78%, while its share of
production is put at 9.22%. By 2015, its share of gas consumption is forecast to be 7.08%, with
the country accounting for 7.66% of supply.

For 2011, there is considerable oil demand and oil price uncertainty, but still a very strong
possibility that oil will trend higher. Economic growth may have been subdued late in 2010 and
into early 2011, but should still support meaningful oil demand increases. Non-OPEC supply is
likely to emerge only slightly higher so, with continued OPEC discipline, the foundations have
been laid for an oil price rise – albeit falling well short of the improvement seen this year. It
seems likely that the 2010 average OPEC basket price will have emerged around the US$77.00
per barrel (bbl) level, representing a year-on-year (y-o-y) gain of approximately 27%. Progress
towards at least US$80 is seen as achievable in 2011.

Pakistan’s real GDP growth in 2010 is forecast to be 2.4%, with an average annual increase of
3.4% forecast for 2010-2015. Several state-controlled oil and gas companies are in the throes of
privatisation, and already work with international oil companies (IOCs) in the upstream segment.
BMI foresee oil and gas liquids production of no more than 65,000b/d by 2015, with the country
able to pump an estimated 80,000b/d in 2010/11. Consumption beyond 2010 is forecast to
increase by around 2% per annum to 2015, implying demand of 464,000b/d by the end of the
forecast period. The import requirement would therefore be approximately 399,000b/d by 2015.
Gas demand is set to rise from an estimated 38bcm in 2010 to 45bcm by 2015, requiring imports
of up to 3bcm.

Between 2010 and 2020, we are forecasting a decrease in Pakistani oil production of 42.50%,
with crude volumes falling steadily to 46,000b/d in 2020. Oil consumption between 2010 and
2020 is set to increase by 22.49%, with growth slowing to an assumed 1.5% per annum during
the period and the country using 512,000b/d by 2020. Gas production is expected to rise from an
estimated 38bcm in 2010 to a possible 48bcm by 2020. With demand growth of 44.27%, this will
require imports rising to almost 7bcm by the end of the forecast period.
 Oil Prices In Pakistan

Current Oil Prices in Pakistan

Product Price [Rs.]

HOBC 99.92
Premium 88.41
High Speed Diesel 97.31
Light Speed Diesel 88.3
Kerosene Oil 89.7

Change in Oil Prices Three Months

Product Feb-2011 Mar-2011 Apr-2011

HOBC 86.67 90.96 98.12

Premium 72.96 76.54 83.56
High Speed 78.33 82.21 92.89
Diesel
Light Speed 66.61 69.97 78.98
Diesel
Kerosene Oil 70.95 74.45 84.10
 The Top 10 Ways to Reduce Your Oil Consumption
Unfortunately, this year it looks like we’re not going to be able to count on a nice drop in
gasoline prices during the fall and winter. With crude oil futures sitting at $90 a barrel and
demand for both oil and gasoline going nowhere but up, it looks as if oil may test the $3 per
gallon mark within the coming weeks or
months.

Since the $3 mark is usually reserved for the

summer’s peak driving season and hasn’t
ever happened during the winter months, we
could very easily be setting ourselves up for
$4 gasoline by the time May comes rolling
around.

No matter what you do, increased gasoline

prices are going to affect you in some way.
While the price increase may hurt some
more than others, the fact remains that we’re
all going to have to become accustomed to
the fact that the days of cheap gas (and
energy in general) are in the rear view
mirror.

That being said, there are plenty of things you can do to help minimize the effect of higher
gasoline prices and allow you to do your part to help save the environment. Thankfully, most of
these things are pretty common sense and can be integrated very easily into your regular “driving
routine,” so much so that it shouldn’t take long for these habits to become second nature.

So, without further ado, here are the Top Ten Ways to Reduce Your Gasoline Consumption

1. Avoid from Un-Necessary Driving:

Think about it, how many small, wasted trips do you take each week where you drive less than a
mile or two? If you’re going to the grocery store to do some major shopping it’s certainly
understandable to bring your car, but if you’re just going to pick up a couple items, why not walk
or ride your bike? Same can be said for trips to friends’ houses, driving the kids to school, etc.,
etc. Moral of the story: if you don’t drive you don’t use gas.
 2. Switch Off Your Vehicle When You Are Idle:
If you do have to drive, minimize the amount of time you sit in idle. Here’s a pretty easy general
rule of thumb to remember: if you’re car’s
running and you’re not moving, your gas
mileage has dropped to zero mpg. I know for
many of this, this is probably easier said than
done, especially considering it’s pretty tough
to avoid the daily rush hour traffic. However,
if you find yourself stuck at a stoplight or
know that it’s going to be a minute or two
before you get moving again, turn off your
car(assuming it’s safe to do so). Essentially, it
takes about ten seconds worth of idling to use
as much gasoline as it would to restart your
car; this means if you’re going to be sitting at
a stoplight for a minute or two, it’s best to shut the car off and save gasoline.

3. Do not Drive Badly:

When you finally get the car moving, make sure to use a nice, steady and moderate acceleration.
A heavy foot means you’re going to get pretty bad gas mileage. Essentially, you’re making the
car’s engine work much harder than necessary, and in order to get the required energy to quickly
get up to speed, it’s going to need to burn more gasoline. However, you also don’t want to
accelerate so slowly that you bog down the engine, as this will reduce your gas mileage as well.
Nice and steady wins the race.

4. Do not Extreme Fast Drive:

Now that you’re up to cruising speed, try to stay at or near the speed limit. While the optimal
speed for gas mileage is going to vary by make and model, it’s a pretty good rule of thumb that
the fast you go, especially at highway speeds, the worse gas mileage you’re going to get.
According to FuelEconomy.gov, driving over the speed limit at highway speeds will reduce your
vehicle’s gas mileage by between seven and 23 percent. When it’s all said and done, that adds up
to a lot of wasted gasoline and a lot of wasted money.

5. Do Not Use Un-Necessary Breaks:

When driving, keep your eyes down the road and coast whenever possible. By constantly tapping
your brakes or accelerating up to stoplights or stop signs, all you’re doing is needlessly burning
fuel. By being on and off the brakes, you’re wasting the energy (i.e. burned fuel) it took to get up
to speed and then you’ll need to burn more fuel to get back up to speed. By accelerating up to
stoplights and stop signs, again, you’re using energy that you know you really don’t need. If you
give yourself plenty of room between the cars in front of you, you should have no problem
seeing what the conditions are like ahead of you, which will allow you to do plenty of coasting
and help you avoid brake tapping and needless accelerating.

6. Make sure that your car’s tires are properly inflated:

Before you get out on the road, make sure that your car’s tires are properly inflated. Think of it
this way; have you ever tried to ride a bike that had under inflated tires? It took a lot more work
to get up to and maintain speed, didn’t it? Same thing goes for your car; under inflated tires will
essentially reduce your car’s gas mileage by two to three percent. While that may not seem like
much, this might – if every driver in the United States improved their vehicle’s gas mileage by
2%, we would save nearly 3 billion gallons of gasoline each year.

7. Replace your car’s dirty air filter:

Replace your car’s dirty air filter. Driving
around with a dirty or clogged air filter can
reduce your vehicle’s gas mileage by up to
ten percent, which at today’s prices, is the
equivalent of adding about 28 cents to each
gallon of gasoline you buy. It probably takes
less than ten minutes to change the filter and
will probably set you back less than 20
dollars, so there’s really no excuse to not get
this done.

8. Get all of the useless and needless items out of your car:
Get all of the useless and needless items out of your car. As a general rule of thumb, for every
extra 100 pounds you carry around in your car, you reduce its gas mileage by one to two percent;
and if you want to get into the minutiae of it, for every extra pound you carry around in your car,
you reduce its gas mileage by 1/100th to 1/50th of a percent. So, now that it’s fall, get the golf
clubs out of the trunk of your car and maybe with the money you’ll save on gas, you can splurge
and buy the big bucket of balls at the driving range.

9. Keep your car as aerodynamic as possible:

The more aerodynamic your car is (6meaning the less drag that’s put on it) the better your gas
mileage is going to be. This means you should drive with the windows up (more on that in a
second), the sunroof closed and keep any extemporaneous items (car top carrier, sports team
flags, etc.) in the vehicle.

10. Obviously, there are going to be times when it’s warm in the car, you need some air
flow and the vent alone just isn’t going to cut it. Now you’ve got to make the choice
between rolling down the windows or turning on the air conditioning. If you’re traveling
less than 35 mph, you should probably go ahead and just roll down the windows, as there
shouldn’t be too much drag on your car. However, once you start traveling above 35 mpg
and approach highway speeds, you should keep the windows up and turn on the AC.
Regardless of which one you chose, you’re going to reduce your vehicle’s gas mileage,
but by following this rule of thumb you can help minimize the effects.

Now that you’ve been armed with some pretty easy and simple ways to save gas and maximize
your vehicle’s gas mileage, I’d like to suggest that you print out this article and leave a copy in
your car as a reminder to try your best to reduce your gasoline consumption. In the end, both
your bank account and the environment will thank you for it.