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Oil and gas prices, adjusted for inflation

Every time I hear someone complain about the price of gasoline, I wonder: how do today's prices really compare to the prices of the crises in the 1970s? Today, I happened to stumble upon not one, but two different charts of this data, adjusted for inflation:

First, the price of a barrel of crude oil, in 1999 dollars: Crude oil prices from 1860-2000
(Courtesy of Wikipedia)

As you can see, our current prices of $60/barrel are high, but the 1981 peak price is about $70/barrel when adjusted for inflation.

Price of gasoline, from 1980 to mid-2005, adjusted for inflation

I've expected for a while that our current steady climb in prices will not stop until we have reached at least $2.50 for a gallon of gas. (My corner station is currently selling the lowest-grade gas for $2.39.) Looking at this graph, I would guess that most of the population will start doing something to curb their gasoline use when the price rises to $2.75 or more, since the record high is just over $3 in today's dollars.

One side benefit to being a one-job family: we're using less than half the gasoline we did before. :)
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daedaleandeus July 18th, 2005
Please try to remember when making your predictions that gasoline prices in MA do not represent gas prices throughout the US. On LI for example, they are upto $2.80 for regular, and I have seen as much as $3.05 for premium. I cannot comment on the population density of LI versus MA with certainty or proof, but having lived both places, I would bet LI has more PPSI (people per square inch). I have seen no action in my contacts on LI to curb gas use, its just seen as something they have to deal with. Im thinking the breaking point is much higher, up near $4.00. Regardless, if there arent hydrogen cell engines available when I purchase my next car, diesel engine it is, and I'll be opening a bio-diesel lab in my basement.

anitra July 18th, 2005
I know MA prices are not representative. However, they are the ones I see fluctuate day-to-day. So, my predictions are based on gas reaching said prices in Massachusetts.

You may be on to something with the $4 price, though. I know plenty of people who grumble about the price now, but they're not willing to trade in their trucks, Jeeps, and SUVs for compact sedans. They are also not (yet) willing to walk/bike more or take public transportation - though for many people, those aren't viable options (for example: I live 28 miles from work, so biking would be pretty strenuous, and you should already know my issues with the commuter rail). I think I will see more car-pooling among the people in my office when we get up to about $2.75 or $3.

re: Long Island

etherial July 18th, 2005
I admit, I haven't been to much of Long Island, but my impression was that Massachusetts has a higher PPSI and LI has a higher $PSI.

Re: Long Island

(Anonymous) July 13th, 2006
Your table is not a table of inflation-adjusted prices at all; if you go to the source, those tables are not inflation-adjusted, but rather adjusted for the change in number of minutes worked to buy a gallon of gas. That is not at all the same thing; the hours-worked adjustment reflects all the major changes in work-week, and in the percent of time spent to acquire basic necessities. It shows that there have been major life-style changes, but has little to do with inflation-adjusted prices.

The actual prices, as adjusted for inflation only, show a big peak in 1981; we have about equaled that price in 2006. So it can fairly be said that gas prices, as adjusted for inflation, are nearly the highest they have ever been since 1950; they are double the price in 1972.

See the real charts at http://www.energy.ca.gov/gasoline/statistics/gasoline_cpi_adjusted.html and http://oregonstate.edu/Dept/pol_sci/fac/sahr/gasol.htm

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