Ah, the good ol’ days. Back in 1978, four years after the oil crisis had ended, the average price for a gallon of gasoline in the United States was 63 cents, or about $2.41 when adjusted for inflation.
Fast forward to July 2008 and the average price per gallon was at an all-time high of $4.11, and that despite a study by the National Renewable Energy Laboratory that claimed that ethanol blends actually had reduced fuel prices by nearly 20 cents a gallon.
The ups and downs of the cost of fueling the American automotive fleet is the subject of a new graphic produced by original-equipment fuel-pump produced Auteria and is based on research from AAA, energy.gov and other sources.
“Since we’ve spent nearly five decades building fuel pump assemblies, the fluctuation of gas prices is something we’ve always tracked,” Ana Rivera, Auteria product manager, is quoted in the company’s news release. “As vehicle and part innovations continue to improve fuel efficiency, we wanted to chart other factors that have affected how much drivers spend on gas.”
Auteria notes that its graphic display highlights how prices look when adjusted for inflation.
“It also focuses on a few reasons for the most significant pricing highs and lows in recent history,” the company said.
For example, the chart shows that prices jumped to an average of $1.25 per gallon in 1981-82 or about $3.00 per gallon when adjusted for inflation.
“Like the extreme prices of the 1970s, this early ’80s peak was caused by an embargo,” the company noted. “The difficult socio-political issues between the United States and Iran had resulted in the U.S. embargo of oil from Iran.”
American drivers got a pricing reprieve from the mid-’80s until Iraq invaded Kuwait in 1990, when prices at the pump jumped 19 cents a gallon in nine months.
Another factor in pricing is taxes, Auteria said.
“Americans have been paying a federal tax on gasoline since 1932,” the news release noted. “The chart illustrates a dip in gas prices in 1993. Part of that 1993 price was the federal excise tax on gas that became 18.4 cents per gallon. It has remained this amount ever since.”
Yet another factor is the Organization of the Petroleum Exporting Countries, which was formed in 1960. Meeting in 1999, the group lamented low prices and agreed to reduce production, resulting in a jump of around 40 cents a gallon for American drivers.
“As the chart reveals, U.S. gas prices continued to climb throughout the early 2000s,” the news release said. “Efforts to reduce gas costs had been evolving and, by 2000, much of the gas American drivers used contained 10 percent plant-based ethanol.
“The U.S. was fighting two wars for more than six years when the 2008 recession hit,” Auteria noted.
By 2015, “American oil shale production was going strong and prices at the pump were steadily declining. OPEC did not decide to reduce oil production as they’d previously done when gas prices fell. AAA reported the average price of gas per gallon was $1.87 in 2016, the lowest gas had been in 7 years.”
Auteria also noted that in 2016, mid-grade gasoline was 25 cents a gallon more than standard grade, with premium adding another 22 cents per gallon.
In 2017, the average price was $2.42, a big jump from 2016 and just a penny more than the inflation-adjusted price of 1978.
“Geo-political factors, crude oil, refining costs, taxes, distribution and marketing will always affect the price at the pump,” Rivera said. “As auto makers and parts manufacturers, we must keep building quality products that save drivers money on fuel and other car-related costs.”