from December 2011, Culture
The chart above describes average annual gasoline prices in the U.S. for the past 90 years. The black line tracks the nominal or actual gas price (the price at the pump) while the red line translates the price into 2011 dollars. There are a couple of items to note:
- For the second time since 1918, we are now paying as much in real dollars for gasoline (the first being the oil crisis in the mid-70's). Think of that. Commodity prices are supposed to go down when there is vastly more supply of that commodity. Moreover, beyond our ability to produce significantly more gasoline, we are even better at distributing it than compared to 1918, and yet we are paying the same real price as 90 years ago.
- Notice the steep climb in pricing from 1996 to today. In just 15 years gasoline has increased 233%! If we do a little math we can quickly see the average driver who travels 15,000 miles in a year and whose car gets an average of 22 miles per gallon now pays around $1,350 more to drive their car than they did in 1996! If you want to know why a dollar doesn't buy much anymore, look no further than your gas tank.
Imagine if we could return to $1.50/gallon gasoline. If you are a two-car family that's, on average, $2,700 in your pocket — each year.