Historical Gas Prices and Money Saving Tips

Lately, the price of gas has again become a topic of discussion here. It’s come up come up a few times in conversations, as people have expressed concern about how high gas prices might go in the near future. Nobody wants to have his or her bank account depleted even more by spending at the pump, and gas prices have historically been a hot button issue.

It’s hard to blame anyone for such thoughts, as prices have already gone up disproportionately over the years. In fact, I did some analysis on historical data which allows leads to the conclusion that gas prices really have increased more than the rate of inflation over the last 20 years.

Now, many of us have probably surmised as much in general, after noticing how high gas prices have gone lately and how they spiked a few years back. Personally, I have a memory of stopping at a gas station back in the early/mid-1990’s, and seeing gas for less than $1.00 per gallon. It had dipped a bit at that time, and it occurred to me that a road trip at that time wouldn’t be too expensive. Those were the days, weren’t they?

Today, after seeing gas well over $3.00 per gallon here, I decided to check on how prices have changed over the last 20 years. I found a good source of data on gas prices at the Energy Information Administration site, which listed monthly gas data by grade, formulation, and geographic area. I focused on regular grade gas, and a national average.

What I found was the average price of regular grade gas has increased by almost 280% from February 1991 to February 2011:

February 11, 1991: $1.11 average price of regular grade gas

February 14, 2011: $3.10 average price of regular grade gas

Yes, we are spending almost $2.00 per gallon more today than we did 20 years ago!

When you compare that to the CPI (Consumer Price Index), it’s really apparent how gas prices have gone up. Along those lines, I did a similar analysis on monthly CPI, looking at data over the last 20 years.

The time period was one month different due to available data, but I found that CPI has increased 64% from January 1991 to January 2011:

February 1991: 134.6 CPI

January 2011: 220.2 CPI

When you compare the two metrics, it’s easy to see why it seems like gas has disproportionately increased in price – because it most definitely has!

20-year increase in gas price: 280%

20-year increase in CPI: 64%

Now, with any sets of data, there is variability. There have been even higher gas prices within this time frame, such as $4.00 per gallon back in June/July of 2008.  This was followed by a decline in prices down to $1.59 per gallon at the end of 2008.  That was a nice gift for the holiday season, but the rug was pulled out from under us as prices shot back up again, eventually to the levels they’re at today, over $3.00 per gallon.

Bottom line: gas prices have skyrocketed to the point where the resource is comparatively much more expensive today that it was several decades ago.

So, what to do about rising gas prices?

You could employ the following alternative modes of transportation:

  1. Train
  2. Bus
  3. Bike
  4. Walk

The train can work for me, though nothing else would.  If I tried to bike or walk to work, it would be the greatest physical accomplishment of my life. Then I’d probably collapse. Of course, the danger of doing so might catch up to me first.

If these alternatives work for you, great! If not, here are 10 tips on how to save money on gas:

  1. Keep your car’s trunk empty.
  2. Keep your tires inflated to the recommended levels
  3. Use cruise control when driving on the highway
  4. Avoid stop and go traffic
  5. Consider using regular gas instead of higher grade product (make sure this is ok for your car)
  6. Plan your trips ahead of time, so you make fewer stops and drive less
  7. Carpool
  8. Employ certain hypermiling techniques (as long as they are safe)
  9. Special Tip: Buy gas early in the morning when the ground is cold; the gas is more dense at this time of day, so you get more for your money than later when warmth causes gasoline to expand
  10. Super Special Tip: You’ll have to check out the extreme frugality displayed in Squirreling Gone Wild #1 to learn more :)

Comments

  1. says

    I remember a time when gas was 99c and an awesome economy!

    But if it is any consolation, US still has one of the lowest gas prices in the world. With all the trouble in the ME, gas prices aren’t going to come down anytime soon and we’ll once again see record profits for Exxon and BP.

    • Squirrelers says

      Moneycone – I agree with you on gas prices not coming down. Just today, after this post was already published, I saw gas for over $3.70 per gallon in Chicago. Not cool at all! Who knows though, this might seem like a bargain at some point. Let’s hope not!

  2. says

    How about buying a fuel efficient vehicle? I still see many huge vehicles on the road today. Gas price is not high enough in my book. People will make changes if gas is really expensive. What would you do if gas is $10/gallon?

    • Squirrelers says

      retirebyforty – good point on buying a fuel efficient vehicle. As for gas being high in price, I guess I see it differently because the $3.70 I saw earlier today is pretty high compared to historical standards! If gas was $10 per gallon, there would be major problems for all of us.

  3. says

    I mean, really, it’s only the beginning. There are literally two billion people in China and India who are accumulating wealth, and several hundred million who are expected to become “middle class” in the next few years.

    That’s going to create quite a strain on oil supplies, especially considering personal transportation remains the #1 status symbol for many in the emerging markets.

    All things considered, I do a lot of city driving, but gas won’t squeeze me too hard. I’ve a small 4cyl car, and frankly, I’m more worried about tuition inflation. :P

    • Squirrelers says

      JT – I suppose it’s a matter of priorities and our individual situations, in terms of the focus on gas prices. Have to say, the high prices will impact most of us if they get much higher. Our economy will be impacted.

      As for the status symbol aspect, it’s confounding with respect to logical behavior. But, consumers aren’t always logical as we know. It’s not needs that sell, it’s wants that sell sometimes.

    • Squirrelers says

      krantcents – good point, those little rebates can help out a little bit. Even if a few cents per gallon, it could still add up to something. Why leave money on the table, right?

    • Squirrelers says

      Robert – yes, many people really are dependent on driving. That’s why I think that gas prices getting out of hand can wreak havoc with many people’s finances, not to mention some aspects of our economy.

  4. says

    I remember when I first had my apartment just over 10 years ago, it was under $300 to fill our oil tank. I just had a fill this morning and it was over $900. Has heating oil followed the same trend? I would think it has.

    Interesting analysis. I absolutely remember filling my gas tank for $20. Those were the days and I did take lots of road trips. I even remember just going for drives to get out of the city with no particular destination in mind.

    • Squirrelers says

      First Gen – those were the days, weren’t they? Actually, I remember filling up for about $15. Driving home from college wasn’t that expensive. The same trip would be over $50 today, still quite a bit despite inflation. Those days of road trips wouldn’t happen as frequently if prices were high, at least for me.

  5. says

    Hmmm, I’ve been thinking about a Volkswagen diesel TDI for a while now. It may come sooner rather than later. Good analysis. It would be interesting to see how much gas a Franklin 50 cent silver piece could buy in the 1950′s, and how much it could buy today. I suspect roughly the same amount.

    • Squirrelers says

      101 Centavos – thanks, glad you thought it was a good analysis. It’s interesting how prices have increased, and how it they might once again impact consumer behavior.

  6. says

    Nice post!! I remember paying 4.87 a gallon for diesel in 2008, ouch!! I would trade down in a minute if I could. However, my job requires a large vehicle to pull my mobile office and carry ladders :)

  7. says

    I will be purchasing another vehicle soon, and I am seriously taking gas mileage into consideration this time, whereas in the pass, I worried about functionality more.

    Just as a side note, cruise control is a great thing, but never use it on wet pavement!

    Great tips!

    • Squirrelers says

      Everyday Tips – with gas prices as high as they are, they’re probably going to me moving up in importance compared to other product attributes. I drove a larger vehicle once, and really liked it….but am now driving a smaller car and am fine with it. Thinking of the costs gets me feeling fine with it. Also, good tips on cruise control.

  8. Mesto says

    Great travel tip that a friend gave me is to always travel with a back-up prepaid cell phone in your luggage just in case you either are seperated from your usual phone or forget it. Of course, make sure you pick up a company with a good price and a good reputation in terms of network which among prepaid companies can be difficult to find. I travel constantly and always carry a Net10 phone with me since they are covered on both Verizon and ATT and I don’t have to keep the phone active when I’m not using it. I ge the basic $25 aircard for 750 when I travel for an extended period of time.

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