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August 31, 2006
Black Gold
From one year ago today...
Are Gasoline Prices High?
In 1950, a gallon of regular gasoline sold for about 30 cents; today, it's $2.50. Are today's gasoline prices high compared to 1950? Before answering that question, we have to take into account inflation that has occurred since 1950. Using my trusty inflation calculator (www.westegg.com/inflation), what cost 30 cents in 1950 costs $2.33 in 2005. In real terms, that means gasoline prices today are only slightly higher, about 8 percent, than they were in 1950. Up until the recent spike, gasoline prices have been considerably lower than 1950 prices.
According to the Fed, applying inflation from 1950, gas prices in 2006 should be about $2.52:
The news is that gas prices have come down, but not everywhere. The Exxon around the corner from my house is charging $3.16 for mid-grade. Ten miles away, I saw a Shell station at $2.74 for mid-grade. Four blocks from my office, the Shell was charging $3.35 for mid-grade. We're talking an 18 mile spread with prices varying as much as 61 cents.
My last fill up was Tuesday night, right before Ernesto was supposed to visit. I paid $2.94.
Posted by LindaSoG at August 31, 2006 07:40 AM
Comments
But Linda, the Democrats told me it was all Bush's fault that gas prices were up. Thanks for sharing this, what they don't tell is that the environmentalist demands for a designer gas in each city, the clean air restrictions, no new refineries, blocking of domestic drilling and transportation costs are all up which drives the price per gallon up. Factor in OPEC and the fact that our infrastructure hasn't kept up with population growth (no new roads) and you have a vicious cycle of high demand and high prices.
Posted by: Jack at August 31, 2006 12:55 PM
Linda, I live in Ontario, Canada. Gas here is sold by the litre. Four and a half litres to a gallon. A litre is hovering right around 1$. So 4.50 a gal.Canadian,or about 4$ US. Whaddayagonnado.
Posted by: rick at September 1, 2006 11:24 AM