Gas cheaper than water? Not so fast

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The price of oil has been falling soquickly we've had to come up with more and more ridiculous ways to describe how cheap it is.

The U.K. motoring organization RAC — similar to AAA in the U.S. — said on Thursday that if the price of oil continues to drop, "we may get to a bizarre time when a liter of fuel is cheaper than a liter of some bottled waters."

Specifically, RAC said that if oil falls to $10 a barrel this year as boldly predicted by Standard Chartered this week, the price of gasoline could drop 20 percent from its December average (which, at around $6 a gallon in the U.K., was already the lowest price in years).

Of course, gas prices tend to be higher in the U.K. due to higher taxes. But the U.S. Energy Information Administration's most recent forecast predicted that average prices in the U.S. will fall 16 percent year over year in 2016, reaching a seven-year low of $1.90 per gallon in February before rising again in the spring.

So will Americans get to experience the "bizarre time" of paying more for bottled water than for gasoline? It depends how you look at it.

According to wholesale prices released by the Beverage Marketing Corporation, if gasoline falls to that $1.90 this year, it won't be enough. It would take prices below $1.22 to crack the average wholesale price of a gallon of bottled water. That could happen in some states if prices fall further than the EIA expects.

On the other hand, plenty of Americans are already paying far more for bottled water than they already do for gasoline. Some higher-end brands come out seven times the cost of gasoline today, especially if consumers are buying bottles individually.

But even the most common brands are often more expensive per gallon than most people are paying at the pump.

You can buy a 24-pack of Aquafina, PepsiCo's bottled water brand, for $37.50 at Walmart or $22 on Amazon. That's about 406 fluid ounces of water at 5 cents to 9 cents an ounce — or $7 to $12 a gallon!

Some Americans pay $15 a gallon for bottled waters like Voss Artesian water, while others pay less than a cent per gallon for brands like Nestle Pure Life — less than $4 for 32 bottles.

Of course the very best deal is tap water, which is sold for about a tenth of a cent per gallon.

As economist Mark Perry wrote last year for the conservative think tank American Enterprise Institute, and we've explored as well, gasoline is actually much cheaper than nearly every other fluid — including milk, soda and sparkling water.

In the U.K., the average bottle of water costs 47 pence per liter, according to the National Hydration Council. That's about $2.60 a gallon (and still a bit cheaper than the 86 pence a liter price of gasoline predicted by the RAC).

So if gasoline ends up breaking the $1.22 water barrier in the U.S. later this year, it will be saying something about how cheap oil has become as well as how much everyone seems to be willing to pay for a few cents of water in a plastic bottle.

As the chairman of the Perrier Corporation reportedly said in the 1980s: "All you had to do is take water out of the ground and then sell it for more than the price of wine, milk, or, for that matter, oil."