Thursday, May 10, 2007

Gas price perspective

This article in the Hartford Courant does a decent job of putting gas prices in perspective.
If it's any consolation, the country has not yet reached an all-time high in the average cost of gasoline. That occurred in 1981, when gas would have cost $3.22 per gallon in inflation-adjusted dollars, according to the Energy Information Administration..
The graph above shows not the peaks, but the inflation-adjusted annual averages over almost 100 years. Things really don't look so desperate from that perspective, though over the last 5 years we have certainly seen a big jump regardless of how you figure the numbers. I think your average consumer is going to see the sudden jumps but not the long declines -- when gas is relatively stable (nominal dollar amount) but the cost of everything else increases around it. Either way, it's encouraging to hear things like this:
MacDonough, a landscaper, says he changed vehicles when prices rose above $3 a gallon. He has a pickup truck, but now he only uses it for work. The rest of the time he drives a Mercedes he's borrowing from his mother.

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