“Record High” Gasoline Prices

Lynne Kiesling

Here it is, the first week in May, and finally we have the whinging and melodrama that I usually associate with March or April (see, for example, the KP archives from March 2004, with lots of gasoline posts): record high gas prices!.

Just two weeks ago, the U.S. average for a gallon of regular gas was $2.87, but the Lundberg Survey of 7,000 stations nationwide on Friday showed an increase of about 19.5 cents to $3.07. That’s up 88.4 cents since Jan. 19, Lundberg said.

The nationwide average for mid-grade gasoline was $3.18 and premium was $3.28. …

The recent increases are due mostly to refinery problems, Lundberg said, noting there have been at least a dozen additional partial shutdowns in the U.S. and internationally that cut refining capacity.

OK, let’s review … adjusting for inflation, the current nominal price of gasoline would have to be about $5/gallon to be higher than the price at its historical high in 1981. This does not change the fact that prices are in the high range of historical prices, or that these high prices can be difficult for those with long commutes. But please, use the language precisely. I’m convinced that most media outlets do not understand the concept of a GDP deflator. Don’t be that guy that’s clueless about the GDP deflator.

See also Ron Bailey’s post on gasoline from yesterday’s Hit & Run.

I can’t believe that I missed this study from the University of Illinois in October 2006:

As American waistlines have expanded since 1960, so has their consumption of gasoline, researchers at the University of Illinois at Urbana-Champaign and Virginia Commonwealth University say.

Americans are now pumping 938 million gallons of fuel more annually than they were in 1960 as a result of extra weight in vehicles. And when gas prices average $3 a gallon, the tab for overweight people in a vehicle amounts to $7.7 million a day, or $2.8 billion a year.

All the more reason to ride your bike to work; if you ride your bike and lose weight, you’ll be able to buy less gas when you do drive! I do think this is an interesting result in aggregate, but of course the challenge is that each individual is not really going to notice that much of a change in their gasoline spending as their weight goes up.

3 thoughts on ““Record High” Gasoline Prices

  1. The rise in prices is shocking only in it’s rapidity. We’ve gone from $2.39 to $3.25 in about 2 months.

    Like I said, shocking.

    I predict that Prius sales will go through the roof, and Totyota will be able to remove the rebate and stop advertising, boosting their profits back to their formerly obscene levels.

    The other automakers are all releasing new hybrid models in the nick of time. Supposedly there will be over 30 hybrid models on the market by next year.

    But no hybrid model, current or future, has the je ne said quas of the Prius. Nothing sells Priui like high gas prices.

  2. Nothing sells Prii like carpool lane stickers.

    Americans won’t notice the additional cost of gas from being overweight, because their cars keep getting more efficient. That Dodge Dart I had when I was 16 got 12 mpg. If I weighed 40 pounds more than I did then, it might have gotten 11.9 mpg. The least fuel-efficient car I’ve owned since then got over 20 mpg, and I’m currently at 28mpg with a car with better acceleration. Where’s the incentive to diet?

  3. I read in one of the car enthusiast magazines the other day that 25% of the Lexus crossover SUV sales (RX model) are of the hybrid version (RX400h). Keep in mind that the premium for this vehicle is over $3000. For that, you gain 2 mpg on the highway and 12 mpg city, but the damn thing still requires premium fuel!

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