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:
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:
- Keep your car’s trunk empty.
- Keep your tires inflated to the recommended levels
- Use cruise control when driving on the highway
- Avoid stop and go traffic
- Consider using regular gas instead of higher grade product (make sure this is ok for your car)
- Plan your trips ahead of time, so you make fewer stops and drive less
- Employ certain hypermiling techniques (as long as they are safe)
- 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
- Super Special Tip: You’ll have to check out the extreme frugality displayed in Squirreling Gone Wild #1 to learn more