Saturday, May 17, 2008

Some Perspective on Gas Prices

From an article by Robert Bryce in Slate:

When measured on an inflation-adjusted basis, the current price of gasoline is only slightly higher than it was in 1922. According to the Energy Information Administration, in 1922, gasoline cost the current-day equivalent of $3.11. Today, according to the EIA, gasoline is selling for about $3.77 per gallon, only about 20 percent more than 86 years ago.

In addition to comparing the price of gasoline to other “essential fuels” such as a Starbucks venti latte ($23 per gallon) and Budweiser beer ($11 per gallon), Bryce also compares American gas prices (that he calls “dirt-cheap”) to those in other countries around the world:

British motorists are currently paying about $8.38 per gallon for gasoline. In Norway, a major oil exporter, drivers are paying $8.73. In 2007, out of the 32 industrialized countries surveyed by the International Energy Agency, only one (Mexico) had cheaper gasoline than the United States. Last year, drivers in Turkey were paying three times as much for their gasoline as Americans were. The IEA data also show that in India—where the per capita gross domestic product is about $2,700 (about 6 percent of the per capita GDP in the United States)—drivers have been paying more for their diesel fuel and gasoline than their American counterparts.

Here in Canada (or Victoria at least) we’re paying the equivalent of just over $5 per gallon.

All that’s cold comfort for American drivers perhaps, but there’s something to be said or the contention that prices have been far too cheap for too long — a situation that certainly hasn’t done much to wean motorists off petroleum, move our countries towards energy independence or even encourage automobile companies to provide more fuel efficient vehicles. In fact, overall fuel economy had until recently been in a long period of decline since the late 70s.