{"id":2610,"date":"2006-07-01T11:37:52","date_gmt":"2006-07-01T15:37:52","guid":{"rendered":"http:\/\/ncdata.wpengine.com\/?p=1723"},"modified":"2021-03-12T11:23:31","modified_gmt":"2021-03-12T16:23:31","slug":"claim-of-record-high-gas-prices-tanks-under-scrutiny-by-david-ridenour","status":"publish","type":"post","link":"https:\/\/nationalcenter.org\/ncppr\/2006\/07\/01\/claim-of-record-high-gas-prices-tanks-under-scrutiny-by-david-ridenour\/","title":{"rendered":"Claim of Record High Gas Prices Tanks Under Scrutiny"},"content":{"rendered":"

Don’t believe the media hype: Prices at the pump aren’t as bad as you’ve been lead to believe.<\/span><\/p>\n

Compared to what they were nearly 25 years ago, today’s gas prices are a bargain.\u00a0 And they’re a bargain compared to other necessities, too.<\/span><\/p>\n

According to Bureau of Labor Statistics, the average cost of a gallon of regular unleaded gasoline in U.S. cities was $1.41 in April 1981.\u00a0 Excluding federal and state gas taxes, this meant the price was around $1.26.<\/span><\/p>\n

In today’s dollars, that would be about $2.83 per gallon.\u00a0 But in May, the before-tax cost of a gallon of unleaded gasoline was just $2.29 – about 19 percent lower than that.\u00a0<\/span><\/p>\n

Given that we’re living under much stricter air quality standards today than we were 25 years ago, that figure probably understates the real price reduction in gasoline prices.\u00a0 In some areas of the country, motorists must use specialty fuels – the so-called “boutique” fuels – to meet pollution standards.\u00a0 This adds to refining costs.\u00a0 As the Federal Trade Commission has noted, “boutique fuels and differentiated access to gasoline supplies… contributes to variability of gas prices.”<\/span><\/p>\n

1981 isn’t the only year gasoline prices have been comparable to, or higher than, the prices today.\u00a0 Between July 1979 and October 1983, gasoline was fairly consistently over $2 a gallon.\u00a0 During much of the 1920s and 1930s, gasoline prices were higher than $2, too.\u00a0 In 1922, for example, the pre-tax cost per gallon was just shy of 25 cents – equal to about $3 today.<\/span><\/p>\n

One part of our fuel bill has increased dramatically in real terms over the years: Taxes.\u00a0 Adjusted for inflation, state and federal taxes on gasoline have increased by 868 percent since 1922 (they were only 0.4 cents per gallon back then) and by 50 percent since 1981 (when they were just 14.5 cents).<\/span><\/p>\n

But even with the recent rise in gas prices, gasoline prices are rising at a slower rate than many other necessities.<\/span><\/p>\n

A half gallon of milk, for example, has increased in price from an average of $1.12 in 1981 to $2.09 in May.\u00a0 While milk prices have increased at a slower pace than inflation, they’ve increased at a faster rate than gasoline prices.\u00a0 Milk prices declined in real terms by around 18.6 percent, perhaps aided by federal government subsidies that the Progressive Policy Institute says amounts to $3.32 for each of America’s 9 million dairy cows, while gasoline declined by a slightly more robust 18.9 percent.<\/span><\/p>\n

(Where are the critics of Big Dairy?)<\/span><\/p>\n

Bread prices also have increased relative to gasoline since 1981.\u00a0 The price for a pound of white bread has increased by 103 percent – about eight percent less than the inflation rate over the period.<\/span><\/p>\n

(Where are the calls for a windfall profits tax on the makers of Wonder Bread?)<\/span><\/p>\n

Moreover, the price of a first-class postage stamp has risen from 18 cents to 39 cents today – almost precisely keeping pace with the inflation rate.<\/span><\/p>\n

Say what one will about gasoline:\u00a0 Whatever price you pay, it gets you where you’re going.\u00a0 A postage stamp, on the other hand, won’t necessarily get your letter delivered.<\/span><\/p>\n

One needn’t consult consumer price indexes to understand that gasoline isn’t significantly overpriced.<\/span><\/p>\n

Consider, for example, how many Americans willingly pay $1 or even $1.50 for a 20-ounce bottle of Dasani drinking water.\u00a0<\/span><\/p>\n

At $1, the price of that water is $6.40 per gallon – nearly 2.8 times the amount Americans paid for a gallon of gasoline last month.<\/span><\/p>\n

If I’m not mistaken, water is the most abundant resource on the planet, it is not controlled by a cartel, its known reserves are not limited primarily to volatile areas of the world and it requires substantially less refinement than gasoline to bring to market.<\/span><\/p>\n

So my advice: Stop complaining about the price of your gasoline.\u00a0 Be thankful your car doesn’t run on bottled water.<\/p>\n

<\/span><\/p>\n

David A. Ridenour is vice president of The National Center for Public Policy Research.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Don’t believe the media hype: Prices at the pump aren’t as bad as you’ve been lead to believe. Compared to what they were nearly 25 years ago, today’s gas prices are a bargain.\u00a0 And they’re a bargain compared to other necessities, too. According to Bureau…<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,68],"tags":[471],"yoast_head":"\nClaim of Record High Gas Prices Tanks Under Scrutiny - The National Center<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalcenter.org\/ncppr\/2006\/07\/01\/claim-of-record-high-gas-prices-tanks-under-scrutiny-by-david-ridenour\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"David Ridenour\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/nationalcenter.org\/ncppr\/2006\/07\/01\/claim-of-record-high-gas-prices-tanks-under-scrutiny-by-david-ridenour\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/nationalcenter.org\/ncppr\/2006\/07\/01\/claim-of-record-high-gas-prices-tanks-under-scrutiny-by-david-ridenour\/\"},\"author\":{\"name\":\"David Ridenour\",\"@id\":\"https:\/\/nationalcenter.org\/#\/schema\/person\/c89efb74544bedf18f820090ec92c477\"},\"headline\":\"Claim of Record High Gas Prices Tanks Under Scrutiny\",\"datePublished\":\"2006-07-01T15:37:52+00:00\",\"dateModified\":\"2021-03-12T16:23:31+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/nationalcenter.org\/ncppr\/2006\/07\/01\/claim-of-record-high-gas-prices-tanks-under-scrutiny-by-david-ridenour\/\"},\"wordCount\":633,\"publisher\":{\"@id\":\"https:\/\/nationalcenter.org\/#organization\"},\"keywords\":[\"National Policy Analysis #541\"],\"articleSection\":[\"Environment and Enterprise Institute\",\"Fuel Economy\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/nationalcenter.org\/ncppr\/2006\/07\/01\/claim-of-record-high-gas-prices-tanks-under-scrutiny-by-david-ridenour\/\",\"url\":\"https:\/\/nationalcenter.org\/ncppr\/2006\/07\/01\/claim-of-record-high-gas-prices-tanks-under-scrutiny-by-david-ridenour\/\",\"name\":\"Claim of Record High Gas Prices Tanks Under Scrutiny - 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