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historical gas prices


ERICOPOLY
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I figure the price of fueling the average car today is on the cheap end of historical experience.

 

Except for the 1990s when most commodities were historically cheap, the period around 1972 had the cheapest gas prices.  However the fleet averaged about 12 miles per gallon.  Today the miles per gallon is about 70% higher relative to 1972 and so are the real gas prices -- so the price per mile is about the same.

 

Historical inflation adjusted gas prices:

 

http://www.inflationdata.com/inflation/inflation_rate/Gasoline_Inflation.asp

 

Fleet fuel economy:

 

http://earlywarn.blogspot.com/2011/05/us-fleet-fuel-economy.html

 

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This is really interesting.  I remember when I first started driving that I always thought of gas as about $1 a gallon.  Sometimes a little more, sometimes (gloriously) less.  I see on the chart that my memories are accurate.  My wife who grew up in the South recalls paying in the neighborhood of 30-40 cents a gallon.  Probably never see days like that again.

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What amazes me was that gas in today's dollars was only $3.75 in 1918.  Since this was relatively early on in the adoption of the automobile and a national distribution infrastructure, I am surprised it was not much more expensive.  Perhaps there was still some of the dynamic of it being a 'by-product' of kerosene refining.

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I pumped gas in 1982.  Our price per litre was roughly 0.40 cents.  Today I paid 1.25. 

 

Both times are at highs in the cycle.  That is just under a 4% increase per year.  Roughly the 30 year rate of inflation. 

 

People react very irrationally to fuel prices.  Today I fueled up at some gas station on a major highway that was empty of cars.  The price was 125.9 per litre.  A mile down the road people were lined up in what looked like close to a 10 minute line to get gas at 123.9, a savings of 2 cents per litre.  In my vehicle that would work out to about 1.20 per litre savings, if I was willing to wait ten minutes.  I am not.  My time is worth about 200 an hour to me, if I were to bill myself, so ten minutes would cost me perhaps $30.  I am taking the money made between salary and investing over the last 8 years and dividing it roughly by time spent to get my billing rate.

 

I will use a generic ATM in a variety store at a cost of 1.50, rather than drive up to the nearest CIBC machine to save the 1.50 - starting and stopping my vehicle and driving to the extra stop takes more time and money than making the one stop. 

 

Most people are not rational about time and money. 

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