27 years of gasoline prices: actual & inflation adjusted

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Gas prices.
Sure SEEM high today but, without inflation, they're LOWER than 1979!
Take a look:
http://www.randomuseless.info/gasprice/gasprice.html

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T.G. Lambach wrote:

Don't you know that most people in the U.S. like to bitch? We've had it so good for so long it *seems* as if it's very high now. But you don't see anyone getting rid of their SUVs and Greyhound bus converts to motor home! :-(
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Yeah but keep in mind 1979 wasn't a particularly cheap time for gas and it was rationed (odd/even) at least in California that year.
If memory serves the Arab oil embargo of 1976(?) was the beginning of the end of cheap gas. Try looking at old hippy dippy home reno magazines from that era. It's intersting to see what was a fad/failure and what today is accepted best common practice.
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Richard Sexton wrote:

I beg to differ, Richard. In 1971 we were building a stables in Los Alamos, New Mexico. Being a cheap bastard we cut trees from the surrounding forest and poured creosote in the hole, it cost $0.25 a gallon; almost cheaper than water. Suddenly things changed and it was no longer available. Several months later it was available again at $1.25 a gallon. Natural gas costs jumped 400% about the same time.
I don't remember what happened globally to cause that price increase. But look at http://tinyurl.com/pkrd5 to see how prices have changed since then.
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Yeah but that's creosote. Gas was what 44c/gal in 71 and 65 in 78?
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T.G. Lambach wrote:

all these years you been on this group, I thought you were in Europe!
great data set. m I have same data for last 12 years in Oklahomas, I'll see if I can enter it and do likewise.
j.
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This data is from a Texan.
I live in the San Francisco Bay Area.
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By the same token, a 1980 income of say, $30,000, would be the CPI same as $72,742.71 in 2006. (factor for these 26 years is 2.7521)
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Gasoline prices vs inflation vs 'affordability'
Although I don't doubt that the blogger here has an agenda, all of the statistics he used are publicly available and footnoted.
http://commonsblog.org/archives/000666.php
John M.
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Greetings All,
Hope I'm not to late to join this topic. It always seems when something gets way too expensive for reasons other than normal market action that everyone goes for the old "it's cheap when adjusted for inflation" routine.
Fuel in the US (especially diesel) is way over-priced. Let's not use inflation data to keep ourselves in denial or to foolishly try to feel better about it. The fact is that fuel should be cheaper due to tech advances.
Why dont you try the "inflation" formula on computers and you'll see what I'm talking about... a $6,000 laptop would seem a bargain even though you could get one today for aroud $1,000.
If oil company's were just passing on their added costs, they wouldn't be posting record profits!!!
All the best, Cindy
On Wed, 10 May 2006 18:45:52 -0700, "T.G. Lambach"

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Cindy,
Technology, by definition improves over time - both in its benefits and its price - thanks to all the engineering effort put into it, but oil is a finite, dwindling (and mostly non recyclable) commodity. So the only leverage on its price is to reduce demand by using less of it.
Other commodities like copper, gold and silver, even land, are recycled when their raw materials price gets high enough to justify that effort, but gasoline, jet, diesel and heating fuels, once burned, can't be reclaimed no matter what oil's price.
The current world oil price is inflated, more by speculation than exploration and production costs, but that's what happens when markets are destabilized.
Tom
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your thesis is faulty because you are ignoring that technology advances have little to do with the price of oil, politics, economics and lifestyle changes are what drive the price.
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Yes, I agree with both of you, T.G. Lambach and jdoe....
My point was that IMHO it isn't correct to apply inflation figures to today's outrageous fuel prices then say it is still a bargain. Fuel is no bargain at these levels regardless of inflation data!!
I also agree that fuel prices are not high because of normal market action such as supply and demand or extraction costs.I feel that most is due to greedy oil companys and greedy OPEC ministers.

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Cindy wrote:

I don't see anyone using inflation data to say that fuel is a bargain, only to put it into perspective. The inflation adjusted price doesn't make it look cheap, it only shows that it's not the worst it's ever been. And that seems perfectly valid.
I also don't know what technology you are referring to that is supposed to make fuel cheaper. Exactly the opposite has happened. The EPA requirements today require fuel to be made cleaner, diesel sulfur extraction, or gasoline additives for example. The formulation requirements are even different for different areas of the country, making moving fuel from where there is excess to where it's needed impossible short term.
I also agree that fuel prices are not high because of normal market

So, the fact that demand has risen as the world's economies have grown and Americans have chosen to buy big SUV;s, taking demand to an all time high isn't a major factor? Or the fact that in the US, vast areas offshore where we could be drilling for more supply, or ANWAR continue to be kept off limits? Did you hear about Katrina? Knocking out virtually all the oil well platforms in the Gulf of Mexico, which still aren't back online wasn't a factor?
Oil companies, like all businesses are supposed to be greedy. That's how the free market works and what makes it successful. Do you think the local grocery store, car wash or a home seller sets prices based on altruisim? In fact, one of the basic principles of microeconomics is that firms set prices to maximize profits. That's what makes economic competition work. In the case of OPEC, they are behaving exactly like an oligopoly is expected to act.
If you take the hysteria out of the record oil company profits, what they are making accounts for maybe 15 cents a gallon, which isn't a lot of the $3 price. The Fed and state govts here in the US take twice that in tax, plus half the oil company profits in tax and nobody is bitching.

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Interesting points trader4 but I must comment....

I believe it is worse than ever, there are commuting families that are quitting jobs because it is no longer feasable to commute to work.

The formulations and requirements aren't much different than a couple of years ago when fuel was almost at half the price it is today.

Sorry, free markets don't work that way. If your local grocer charges you 20% more for the same product , you go to a competing grocer. Problem is that there is no redily available substitute for gas and diesel right now and that's why the OPEC leaders are taking advantage of it. Hugo Chavez whas recently asked what is a fair price for a barrel of oil and he responded, 'anywhere between today's levels and infinity"!

Yes, I realize there are a lot of factors at work and yes I belive the majority of the increase is due to the oil suppliers and big oil taking advantage of the instability in the middle east. Of course I understand that a lot is due to the irresponsible view of the SUV crowd and other factors that we have some control over.
Bottom line is we should have been a little smarter and invested heavily in the oil sector (when G.W. was first elected) seeing that the US President and Vice-President are both in the business. IF we would have, even $10.00 per gallon gas would seem cheap to us right now.......
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nonsense, where did you dig up this crap from?

your point is?? the base crude oil has gone up almost 300%, causing the price of products refined from crude oil to up a similar amount

it's the old story, he who has the gold makes the rules and opec has the gold.

invested in what?
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Furthermore, there where there are REALLY high prices (in most of the world outside NA) the cause is government taxation.
And still the prices are not always the highest they have ever been in inflation-adjusted terms. And cars are cheaper than ever.
DAS
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Cindy wrote:

You can believe what you want. The fact is, adjusted for inflation, gas prices were about the same, or slightly higher back in 1979-80. And we had gas lines half a mile long along with it. Plus the typical car gets 50% better mileage today. If so many people can't get to work, it's pretty strange that the US unemployment is lower than what economists used to consider full employment.

Not much different? How about this:
May 10, 2004: Today, the Bush Administration announced one of the most dramatic advancements in clean air protection since passage of the Clean Air Act Amendments of 1990. EPA's Clean Air Nonroad Diesel Rule requires stringent pollution controls on diesel engines used in industries such as construction, agriculture and mining, and it will slash sulfur content in diesel fuel.
See where it says "slash sulfur content of diesel fuel"
Or how about this from Chevron:
When is S15 (ULSD) required to be produced and sold? Introduction of the new 15ppm diesel into different portions of the diesel fuel supply channel will be managed through staggered compliance dates. For North America, there are currently three S15 (ULSD) implementation timelines.
United States (except California)
On-Highway Diesel Fuel Refinery < 15ppm by June 1, 2006 Terminal < 15ppm by September 1, 2006 Retail < 15ppm by October 15, 2006 Off-Road / Locomotive & Marine Fuel < 500ppm by June 1, 2007
California
On-Highway, Off-Road, & Fixed Equipment Diesel Fuel Refinery < 15ppm by June 1, 2006 Terminal < 15ppm by July 15, 2006 Retail < 15ppm by September 1, 2006 Intra-State Locomotive / Marine Harbor Craft Fuel < 15ppm by January 1, 2007
Or how about this regarding gasoline:
The Tier 2 regulation will also reduce average gasoline sulfur levels in the USA. These reductions could begin to phase in as early as 2000, with full compliance for most refiners occurring by 2006. The program requires that most refiners and importers meet a corporate average gasoline sulfur standard of 120 ppm and a cap of 300 ppm beginning in 2004. By 2006, the average standard will be reduced to 30 ppm with 80 ppm sulfur cap. Temporary, less stringent standards will apply to a few small refiners through 2007. In addition, temporary, less stringent standards will apply to a limited geographic area in the western USA for the 2004-2006 period.
It's pretty clear that the refining requirements have been steadily getting tougher, over not only the last few years but even as we speak. BTW, what is the technology you claimed should be reducing the cost of fuels? In reality, it's getting more expensive because it cost more money to make fuels cleaner.

Your analogy is wrong. Following the analogy of the grocery store, just as you are free to go to another grocery store, you are also free to shop for gas by going to a different station that sells gas at a better price. You don't switch most of the core food products you eat, you just find them somewhere else at a better price. And using grocery stores as an analogy is actually a pretty good one, because in any given area there are usually maybe 5 big grocery stores that compete. In the same way, there are usually at least that number of gas station alternatives. Competition works for the grocery stores and it works pretty much the same for the oil companies.

So, here we go again. It's not OPEC, rising world demand, a hurricane that wiped out production in the Gulf of Mexico. It's all Bush and it could have been predicted. US and world demand has been rising forever, without regard to who's President. When Bush's father was in office we had some very low oil prices. Of course that gets ignored because it doesn't fit your simplistic Bush family conspiracy theories
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Back in 1979 - 1980 I was driving a Ford Capri. I used to put 1-00 of petrol in on a Monday and it did me until Thursday, and that was driving to work every day. I'm in the UK by the way and the biggest robbing bastards over here are the Government. I filled the car up tonight and the petrol cost 95.9p per litre. Over 80p of that goes in taxes to the bloody government!

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snipped-for-privacy@optonline.net wrote:

I can't quote sources as well as you did, but I lived in Torrance, CA in the 50's and often had to go to LA; visibility was about one (uno, 1) block! It often became noticeable with the eyes started burning and those "in the know" said, "it's cigarette smoke, it's proved by the fact it starts to grow about 7 am when people get up and have their first cigarette."
I also did some offshore sail boat racing. My first race was the Cinco de Mayo that went from LA to Ensenada. We'd go out about 20 miles and fall off to a line to head for Ensenada. I looked toward shore...what shore? All I could see was a brown haze.
Personally I don't believe it was all from cigarette smoke, does anyone here? :-\ For one thing not that many people lived in LA, they all lived in the suburbs where the air was clear. ;-)
As for gas mileage I offer: In 1948 I had a '36 Ford that got 12 mpg up hill or down. Today I've a '02 MB E-320 that gets 28 mpg on the highway!
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