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2010-12-30 09:42:00 - By

Where Might Gas Prices Head Over The Next 5-10 Years?




Earlier this week, I linked to an article in which John Hofmeister, former president of Shell Oil, proclaimed that the price of gasoline could hit $5 a gallon by 2012.

The national average gas price has been slowly trending higher after crashing to an average of $1.616 a gallon in December of 2008 (the national average for a gallon of gas had hit $4.114 just a few months earlier). As it stands right now, the national average price for a gallon of regular unleaded gasoline is $3.071, with many market observers expecting this to spike in the months leading up to the summer.

With that being said, a number of people have emailed over the past few days, asking how the current price of gasoline compares to years past when adjusting for inflation. Did it cost more to fill your car in the 1950s on an inflation-adjusted basis? How about in the '70s and '80s, when the price of oil spiked due to multiple oil crises?

Fortunately for us, the Energy Information Administration (link below) has produced a handy chart that lets us look at the average price of gasoline from 1949-2009 in chained 2005 dollars.

If your inkling was that gas prices have never been higher (in inflation-adjusted terms) over the past number of years, then you would be right.

From 1949-1975, the Energy Information Administration only provides numbers for leaded regular gas prices, for obvious reasons.

Here are the inflation-adjusted average prices for a gallon of leaded regular from 1949-1975:

1949 - $1.85
1950 - $1.83
1951 - $1.73
1952 - $1.72
1953 - $1.78
1954 - $1.78
1955 - $1.75
1956 - $1.74
1957 - $1.75
1958 - $1.68
1959 - $1.66
1960 - $1.67
1961 - $1.64
1962 - $1.61
1963 - $1.58
1964 - $1.55
1965 - $1.57
1966 - $1.57
1967 - $1.57
1968 - $1.53
1969 - $1.51
1970 - $1.47
1971 - $1.43
1972 - $1.36
1973 - $1.38
1974 - $1.74
1975 - $1.69

It's interesting to note that spike in gas prices from 1973 to 1974 - this came as a result of the 1973 oil crisis, which resulted from the members of OAPEC enacting an oil embargo in response to "the US decision to re-supply the Israeli military" during the Yom Kippur war. The embargo lasted from October 1973 to March 1974, and resulted in dramatically higher oil and gas prices.

There was another energy crisis in 1979 when the Shah of Iran fled his country, throwing the Iranian oil sector into disarray. Things went from bad to worse after the Iraqi invasion of Iran in 1980, and the price of oil spiked as a result.

Let's look at average unleaded regular prices (in chained 2005 dollars) from 1976 through to 1983 as the United States dealt with yet another oil crisis:

1976 - $1.73
1977 - $1.74
1978 - $1.66
1979 - $2.06
1980 - $2.61
1981 - $2.64
1982 - $2.34
1983 - $2.15

The United States saw a noticeable uptick in the price of gas from 1976-1983, thanks to the situation in Iran.

Now let's look at gas prices from 1984-1992. This period of time includes the Gulf War and the recession that followed shortly after:

1984 - $2.03
1985 - $1.95
1986 - $1.47
1987 - $1.46
1988 - $1.41
1989 - $1.47
1990 - $1.61
1991 - $1.53
1992 - $1.47

The only really interesting piece of data here is the large drop of the price of gasoline in 1986. This came as a result of reduced demand and overproduction, which resulted in the short-term loss of OPEC unity.

Now let's look at 1993-2000, when the United States was in the midst of an incredible economic boom:

1993 - $1.42
1994 - $1.39
1995 - $1.41
1996 - $1.48
1997 - $1.46
1998 - $1.24
1999 - $1.34
2000 - $1.70

Gas prices remained relatively stable from 1993-1999 before enduring a sizable uptick in 2000 as the phenomenal run in US tech stocks started to come undone.

Now let's look at 2001-2009. This time period featured 9/11, the wars in Afghanistan and Iraq, the rise of the BRIC countries (Brazil, Russia, India, China) and a near global economic meltdown:

2001 - $1.61
2002 - $1.47
2003 - $1.69
2004 - $1.94
2005 - $2.30
2006 - $2.51
2007 - $2.64
2008 - $3.01
2009 - $2.14

The big story during this period of time was the continued rise of countries such as China and India, which has resulted in an increased demand for oil, gas and other commodities.


Historical Gas Prices in the United States - Chart - 1949 - 2009



As you can see, 2008 was the high-water mark for gasoline in the United States on a historical basis.

However, with countries like China and India continuing to grow at a torrid pace, and with any number of geopolitical events popping up over the next couple of years, you can safely assume that we will take a strong run at $3.01 over the next 5-10 years.

Source: Energy Information Administration


Filed under: General Knowledge



38 COMMENTS - What Say You?

Comment by Archiphile on March 11, 2011 @ 12:48 pm

Dave,

Thanks for the information. It was a well researched and written article. Ans hey I learned what Chained Dollars were too.

--

Comment by Greg on March 16, 2011 @ 2:21 pm

http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

It's at $3.38 already. Though it wasn't clear how you took inflation into account.

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Comment by Jane Doe on April 11, 2011 @ 2:52 pm

Thanks 4 the info!!!!!!!!!!!

--

Comment by Robert Hubbard on April 24, 2012 @ 2:43 am

This is one of those clear showings of the facts. They use these to turn around and compare apples and oranges. Or in this case averages and standing price of the day. Then they ignore what the year's high price was they point at. (see: Greg.)

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Comment by Matt D. on May 28, 2012 @ 2:00 am

I have just seen a youtube vid. http://youtu.be/qKdScVerrBU
that talks about Obama is the reason for the high gas price but with your charts I have set the commentators right Thanks very much for your info. I will be using it as needed. also thanks for posting your source

--

Comment by Zack on May 30, 2012 @ 9:51 am

The numbers in this article disagree with the numbers, also "adjusted to 2005 dollars" on this site here: http://www1.eere.energy.gov/vehiclesandfuels/facts/2005/fcvt_fotw364.html

This is from a .gov site, and it shows prices that are higher than the prices shown here. How very curious.

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Comment by Dave Manuel on May 30, 2012 @ 11:50 pm

Hi Zack

My numbers came straight from EIA.gov:

http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb0524

I'm not sure which numbers they used - unleaded regular? Premium? All grades?

--

Comment by rami on June 03, 2012 @ 4:39 am

thanks 4 the information but the gaz prise depanded at the convention not ....


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Comment by Bill Antrim on June 04, 2012 @ 9:54 am

Doesn't matter what he adjusted rate is. The rate in 2008and the rise in 2009 took income away from all Americans. This was the underlying cause ot the housing collapse. People who were living on the edge (upper and lower) lost the money they needed to pay their mortgages.

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Comment by Bill Antrim on June 04, 2012 @ 10:04 am

It doesn't matter what the inflation adjusted rate is. The rise in gas prices that we experienced in 2009 caused the housing collapse. People who were ling on the fiscal edge (high and low) lost enough income to stop paying mortgages so they could get to work and buy other consumer goods that keeps this eonomy running. Also the corresonding rise in prices due to shipping cost and other fuel needs by industry caused all other prices to rise dramatically. Check the dates on economic collapses in the U.S. and other incedences going on in the world.

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Comment by cheryl on September 08, 2012 @ 2:46 pm

I DO NOT KNOW WHERE YOU GOT YOUR INFORMATION BUT I AM 60 YEARS OLD AND REMEMBER THE PRICE FOR GAS IN THE 50'S THRU THE 70'S THEY WERE 20 CENT A GAL TO 65 CENT A GAL
GET YOUR FACTS STRIGHT!!!!!!!!!!!!!!

--

Comment by Dave Manuel on September 08, 2012 @ 2:59 pm

Cheryl, the article clearly says INFLATION-ADJUSTED

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Comment by Delightful on September 14, 2012 @ 8:15 pm

Clear showing of facts my rear. This story is full of holes and shit too. The numbers don't add up and definitely don't show the high's for the year. I don't care where you got your data. This is incorrect. When Bush was in office gas was sky high for a long time. We know who the author of this story represents. Another stinking republican.

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Comment by Dee Dee on September 14, 2012 @ 8:17 pm

Clear and concise my foot. This article is incorrect. With the facts on this page I can tell you are a republican. Gas was sky high when "Bush" was in office and this doesn't reflect that at all. Tell the truth and do a little more homework before you pass this off as the truth.

--

Comment by Mark on September 15, 2012 @ 9:44 am

Why, (in defense of Cheryl) is the "inflation adjustment" needed? It would have been historically more accurate and interesting to use actual prices for the years that far back.

--

Comment by Nima S. on September 19, 2012 @ 3:16 pm

The source for the 1949-2009 prices above, are from: http://www.eia.gov/totalenergy/data/annual/showtext.cfm?t=ptb0524

--

Comment by Sam on September 20, 2012 @ 2:25 am

Delightful - "I don't care where you got your data." The data came from a friggin' US federal agency! What are you talking about?

--

Comment by bigc on September 30, 2012 @ 11:53 pm

Wow, it is interesting to see people getting angry for correct statistics. This lines up with official publications (and my memory). Oh yea, many Americans do not want facts.

--

Comment by Kat on October 02, 2012 @ 9:37 pm

O' we can do so much with numbers. It all depends on what you want to present. Bottom line is gasoline prices have shown a general trend upward through all decades. Inflation adjust is interesting to look at but incomes have not kept up with inflation. This means more money out of consumers pockets.....

--

Comment by JAFO on October 02, 2012 @ 11:52 pm

Wow, it seems that the CAPS LOCK KEY is stuck on some peoples computers. It is interesting to note the spike in prices in 2005 from the previous year. 2005 was the year of Hurricane Katrina. Gas went up and never really went down. Its also interesting how people are blaming Obama for high gas prices, once again, the fairytale is easier than the non fiction.


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Comment by The Court Jester on October 03, 2012 @ 10:00 pm

This was very interesting and helpful. Bonus: the comments were hilarious!

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Comment by swan on October 06, 2012 @ 2:07 am

Foreign relations has always been the matter of impact on the economy, markedly shown in inflation of gasoline Price. Vice-President Bush during Reagan administration forecasted the future in relation to China...time is current, a New future prediction?

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Comment by visionary on October 06, 2012 @ 8:50 pm

Good info. It is sad to confirm the true state of the matter. I personally don't see any real remedy to the problem with gas prices and their choke hold on our economy. With so much wealth going to a single product, it's hard to imagine any significant economic revival. There are more problems than just gas prices that are plaguing our chances.. Water seeks it's own level. We compete for work with 3rd world countries, and import people to do what can't be outsourced. Citizens in countries that are accustomed to sleeping on dirt.. they might get a mattress and blanket. People who are used to central air in 1st world countries.. well.. they might have to settle for the same mattress and blanket. After all water does seek it's own level. The only ways to make America thrive again, are not politically palatable.

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Comment by sick on October 13, 2012 @ 11:27 pm

I know this info is not correct in 88 gas was 1.00 a gallon and when Iraq war started it went sky high I save all my receipts.I cannot believe people blame obama for high gas prices when it was high before that.It has stayed high during his presidency.This is why I can never be republican to lie to make yourself feel better is sick.

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Comment by shade on October 16, 2012 @ 8:33 am

i know in 1996 the gas price for our area was $0.79 a gallon so where does the price of

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Comment by bill on October 19, 2012 @ 2:03 pm

I suggest everyone go to the CPI calculator and check these numbers before they run out and vote

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Comment by gary on October 29, 2012 @ 7:02 pm

Adjusted for inflation I should be making $ 65.00 per hr.This is the crap the GOV wants us to believe!!!!!!

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Comment by Just Me on November 01, 2012 @ 1:03 pm

Just why do people get so bitter. In '92 German gas prices were closer to $3. We didn't catch up until 20 years later. Quit bitching. Be thankful for what we have here.

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Comment by GOD on November 05, 2012 @ 5:14 am

GREED

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Comment by middle class to poverty on November 29, 2012 @ 12:46 am

You want to fix the economy lower the dam gas prices, thought this was the land of oportunity bend over and take it in the ***!!

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Comment by Jay on December 23, 2012 @ 9:08 am

Wow, no wonder this country is in trouble... Look at the purely emotional comments full of "wonderful memories" and "wishful thinking". The world is changing - get on board or get off! See you on the interstate, in your little pokey car!

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Comment by David Metcalf on December 31, 2012 @ 3:36 pm

I don't know what is more disturbing, here: the wild disarray of "facts" without citation, definition or objective comparison, or the sad display of dogged ignorance and stunted intelligence by most of the comments (and, ergo, the commentators). The only saving grace is that none of this stupidity has any measurable effect on gas prices---though, unfortunately, it is faithfully reflected in the general stupidity of the representatives we elect.

--

Comment by Larry G on January 19, 2013 @ 10:12 am

If you then add the average MPG for vehicles during that span, you find that today's prices are comparable to the $/mile paid in the mid 60's and early 80's

Year Year Price 2004 Equivalent Price mpg $/mile
1949 0.268 1.848 8.00 $0.231
1950 0.268 1.829 8.20 $0.223
1951 0.272 1.731 8.40 $0.206
1952 0.274 1.714 8.60 $0.199
1953 0.287 1.774 8.80 $0.202
1954 0.29 1.777 9.00 $0.197
1955 0.291 1.753 9.20 $0.191
1956 0.299 1.741 9.40 $0.185
1957 0.31 1.747 9.60 $0.182
1958 0.304 1.676 9.80 $0.171
1959 0.305 1.662 10.00 $0.166
1960 0.311 1.671 10.20 $0.164
1961 0.308 1.636 10.40 $0.157
1962 0.306 1.604 10.60 $0.151
1963 0.304 1.577 10.80 $0.146
1964 0.304 1.553 11.00 $0.141
1965 0.312 1.565 11.20 $0.140
1966 0.321 1.566 11.40 $0.137
1967 0.332 1.571 11.60 $0.135
1968 0.337 1.53 11.80 $0.130
1969 0.348 1.505 12.00 $0.125
1970 0.357 1.467 12.00 $0.122
1971 0.364 1.424 12.50 $0.114
1972 0.361 1.354 13.00 $0.104
1973 0.388 1.379 13.50 $0.102
1974 0.532 1.733 14.00 $0.124
1975 0.567 1.688 14.50 $0.116
1976 0.614 1.729 15.00 $0.115
1977 0.656 1.736 15.50 $0.112
1978 0.67 1.657 16.00 $0.104
1979 0.903 2.062 16.25 $0.127
1980 1.245 2.605 16.50 $0.158
1981 1.378 2.636 16.75 $0.157
1982 1.296 2.337 17.00 $0.137
1983 1.241 2.153 17.25 $0.125
1984 1.212 2.026 17.50 $0.116
1985 1.202 1.95 17.75 $0.110
1986 0.927 1.472 18.00 $0.082
1987 0.948 1.463 18.25 $0.080
1988 0.946 1.411 18.50 $0.076
1989 1.022 1.469 18.75 $0.078
1990 1.164 1.611 19.00 $0.085
1991 1.14 1.524 19.25 $0.079
1992 1.127 1.471 19.50 $0.075
1993 1.108 1.415 19.75 $0.072
1994 1.112 1.391 20.00 $0.070
1995 1.147 1.406 20.25 $0.069
1996 1.231 1.48 20.50 $0.072
1997 1.234 1.458 20.75 $0.070
1998 1.059 1.237 21.00 $0.059
1999 1.165 1.342 21.25 $0.063
2000 1.51 1.702 21.50 $0.079
2001 1.461 1.61 21.75 $0.074
2002 1.358 1.473 22.00 $0.067
2003 1.591 1.69 22.25 $0.076
2004 1.88 1.942 22.50 $0.086
2005 2.295 2.2 22.75 $0.097
2006 2.589 2.295 23.00 $0.100
2007 2.801 2.637 23.25 $0.113
2008 3.266 3.008 23.50 $0.128
2009 2.35 2.142 23.75 $0.090
2010 2.788 2.512 24.00 $0.105
2011 3.527 3.311 24.25 $0.137

--

Comment by tom on February 09, 2013 @ 2:05 pm

what was the time gas under1.00/gallon

--

Comment by Alex on February 12, 2013 @ 12:46 pm

Things dont look good for our kids
We made things to hard for them

--

Comment by The Z Man on February 14, 2013 @ 3:27 pm

Obviously my last post will not be put up, I will tame it down, WAKE UP AMERICA!! we are being bled dry here!they sit in their high back chairs dicking with our bank accounts to keep us down, this is just one small area we are being drained! How long are you going to put up with it? Its not republican or democratic, its ALL OF THEM! they all have their greedy paws in it, none of them pay for it and we put up with it.

--

Comment by Yearly Gas Prices on March 01, 2013 @ 10:01 am

1950 0.26
1951 0.27
1952 0.27
1953 0.28
1954 0.29
1955 0.29
1956 0.29
1957 0.31
1958 0.30
1959 0.30
1960 0.31
1961 0.30
1962 0.30
1963 0.30
1964 0.30
1965 0.31
1966 0.32
1967 0.33
1968 0.33
1969 0.34
1970 0.35
1971 0.36
1972 0.36
1973 0.38
1974 0.53
1975 0.56
1976 0.61
1977 0.65
1978 0.67
1979 0.90
1980 1.24
1981 1.37
1982 1.29
1983 1.24
1984 1.21
1985 1.20
1986 0.92
1987 0.94
1988 0.94
1989 1.02
1990 1.16
1991 1.14
1992 1.12
1993 1.10
1994 1.11
1995 1.14
1996 1.23
1997 1.23
1998 1.05
1999 1.16
2000 1.51
2001 1.46
2002 1.35
2003 1.59
2004 1.88
2005 2.295
2006 2.589
2007 2.801
2008 3.266
2009 2.35
2010 2.788
2011 3.527

--

Comment by David A Deal on March 07, 2013 @ 8:46 pm

WOW so many idiot replies on here. They did not read that this chart shows prices in inflation adjusted dollars so you can understand how prices actually related over the years to other costs. Yes gas was 28 cents in 1973 in Goshen IN but a 32 oz milk shake at DQ was 35 cents instead of today's $2.50 or a 16 oz bottle of pop was 15 cents then.

--

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