Gasoline Prices in Inflation-Adjusted Terms
Source: BLS Regular Gasoline, EIA Refiners Acquisition Price for Imported Crude Oil
Notes:
- While EIA has noted that from an economic viewpoint, prices today are not that high in real terms, consumers seem to react more to rapid changes than overall levels.
- Today’s gasoline prices, now at almost $1.70 for regular unleaded gasoline, are much less than prices experienced in the first half of the 1980’s when adjusted for inflation. Crude oil peaked at almost $39 nominally in 1981, which is equivalent to $76 per barrel in today’s dollars.
- Yet consumers remember the low prices they paid last year, and organizations budgeted their usual percentage increase for fuel purchases, only to find that those percentages were way too low.
- Price volatility often can be of more concern to consumers in the short run than price level itself. Volatility makes planning and budgeting more difficult, and when prices increase rapidly, they can catch consumers unprepared.