In 1950 gasoline cost was about 25 cents per gallon in the U.S. Inflation has averaged about 7%/annum between that time and now, so at that rate of inflation, to keep pace with increased personal earnings, gasoline should cost about $8.00 per gallon!
Gasoline prices are lower in the U.S. than just about any place on earth, especially considering the average income of U.S. citizens. Don't look for the current prices to go down...ever.
In Eastern Canada it's close to $1 a litre....in Europe it's more like $2 a litre. According to some environmentalists it should be even higher. When you think about it, a bottle of water is more expensive than same volume of gasoline...and people don't even think about buying a bottle of water...
Where do you get a figure of 7% for annulaized inflation? Typically, 3% is used as a planning number.
Anyway, comparing the CPI-U for March 2004 (the latest data available) to that of 1950 (for which a price of 28-29¢/gal is more accurate that 25; I will use the lower 28¢ here), we see that the 1950 price of 28¢/gallon is equivalent to approximately $2.18 in March 2004 dollars. In terms of real (inflation-adjusted) money, the price of gasoline has actually dropped since 1950.
Where do you get a figure of 7% for annulaized inflation? Typically, 3% is used as a planning number.
Anyway, comparing the CPI-U for March 2004 (the latest data available) to that of 1950 (for which a price of 28-29¢/gal is more accurate that 25; I will use the lower 28¢ here), we see that the 1950 price of 28¢/gallon is equivalent to approximately $2.18 in March 2004 dollars. In terms of real (inflation-adjusted) money, the price of gasoline has actually dropped since 1950.
-Terry
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AVERAGE inflation. Throughout the '50s, 60s, and especially the 70s, inflation was rampant, sometimes as high as 12% (Carter's administration). Indeed the cost of gasoline has dropped considerably. Where I lived in 1950, the cost of gasoline at the local stations was 22.9/gallon most of the time. In large urban areas the price may have been higher. The current "3%" inflation figure for the U.S. is calculated using different criteria than the years prior to 1992.
During the Clinton administration, there was a mandate to make things look better than they actually were, so a new cpi was devised that all but excluded real living costs. The present administration has no desire to to alter these optimistic criteria. If you cling to a 3% figure, your purchasing power will erode steadily. I believe that current inflation is closer to 5% regardless of Washington politics to the contrary. Guess I'm just a pessimist and skeptic when it comes to politicians.
Still, gasoline is a bargain compared to costs 50 years ago.
During the Clinton administration, there was a mandate to make things look better than they actually were, so a new cpi was devised that all but excluded real living costs. The present administration has no desire to to alter these optimistic criteria. If you cling to a 3% figure, your purchasing power will erode steadily. I believe that current inflation is closer to 5% regardless of Washington politics to the contrary. Guess I'm just a pessimist and skeptic when it comes to politicians.
Still, gasoline is a bargain compared to costs 50 years ago.
And during the Reagan administration it was changed to exclude housing costs. Your point?
As much as I hate to admit it, you are right Gordon. We pay the lowest price for gasoline than anywhere else in the industrialized world. A bottle of water is more expensive that a bottle of Gasoline for crying out loud!
Back in '99, there was a gas station near my university campus that sold gas regularly at around .79/gallon. At the time, I was pregnant with our third child, so we decided we needed a larger vehicle (an SUV). The average fill-up was about $40.00. I still drive it, and the day before yesterday, that same SUV cost me $69.74 to fill up. I about fell out on the gas station parking lot!
I guess, as people, we are sheep. We do what they tell us to do, buy what they tell us to buy, and so forth. No matter what gas goes up to, we will still keep paying for it. Why are "they" charging us so much for gas? Because they CAN. :0)
When it comes to 95octan unleaded gas I remember throwing it in my tank when I was 17 for EUR 0,71 per litre, now ten years later it is at EUR 1,24!
That is EUR 4,70 per US Gallon, or USD 5,60 per US gallon.
98octan is even more expensive.
Yesterday the European Union said that we pollute to much and that the tax on gas has to be raised again.
What bugs me is the price of Castrol GPS and TTS engine lubricants. At each service the bill is shocking. My FZS needs new GPS oil every 6000km and the NSR smokes TTS faster than a cuban a sigar.
You folks in Europe are getting hosed (pun intended) by the EU. They raised the taxes on fuels because they WANT THE MONEY!
I'll bet pollution has decreased in recent years because of better emission controls on automobiles.
You folks in Europe are getting hosed (pun intended) by the EU. They raised the taxes on fuels because they WANT THE MONEY!
I'll bet pollution has decreased in recent years because of better emission controls on automobiles.
I believe that SAAB did a test in the centre of London with one of their cars and they said that the exhaust gas was cleaner as the air in the city that day. They actually made it a better place. :)
We know the EU wants money, we all dislike them but cannot vote them away. It is a very undemocratic system, but when the constitution will be established there will be a vote on that. Vote away the constitution and you can no longer be a EU member.
You can guess my vote, there is very little that the EU has done in favour of the Europeans the last 20 years. The trade union is good, we have had peace for 54 years in a row (that's a long time for Europe) and the Euro is so so. But at the moment its a lot of 'I am your friend lets screw the other' politics, money grabbing, money wasting, inconsistent policies, stupid rules etc, Keizer Wilhelm & Napoleon made a pact politics.
The public interest in European politics is extremely low all over Europe.
You folks in Europe are getting hosed (pun intended) by the EU. They raised the taxes on fuels because they WANT THE MONEY!
I'll bet pollution has decreased in recent years because of better emission controls on automobiles.
Ain't that the truth. The europeans are getting reemed by the EU because it's in their nature to allow that to happen. :) However here in the US, I'll admit that my pocket is feeling a little lighter these days also, when paying $2.50/gallon for 87 octane at some of the more convenient gas stations I fill up at. Luckily my car gets 42mpg. :)
In 1950 gasoline cost was about 25 cents per gallon in the U.S. Inflation has averaged about 7%/annum between that time and now, so at that rate of inflation, to keep pace with increased personal earnings, gasoline should cost about $8.00 per gallon!
Gasoline prices are lower in the U.S. than just about any place on earth, especially considering the average income of U.S. citizens. Don't look for the current prices to go down...ever.
I don't want to sound mean when I say this...
Unfortunately, I have to say that is a very bad analogy.
There are dozens upon dozens of products that 'haven't kept up with inflation' even a little bit. A great example is that piece of hardware you are sitting in front of right at this very moment, yes your computer.
In the 1980's the 'most powerful' home PC's available could run nearly $4,000 as a well equipped unit. Today a computer system with an insanely greater amount of processing, let alone other capabilities, could be had for less then $1000, again decently equipped.
Personally, I see these higher gasoline prices as a strong incentive for us gass guzzlnig Americans to start cutting down the average automobile size. Personally, I feel that's a good thing all around. Smaller automobiles mean less fuel consumption, lower fuel consumption means lower amounts of exhaust, lower amounts of exhaust means better air quality.
