Are gas prices really the highest ever?

Individual Research | unpublished | Don Simmons

[Don Simmons]

Myth: Today's Gas Prices are Highest Ever

OK, now regular gas prices have risen to an all-time national average high of $1.74 and people are screaming to high heaven about it. However, most people fail to consider some very important facts as they complain every time they go to the pump. (It doesn't slow down their trips to the pump, mind you - they just complain more!)

Fact: Our national average gas price in 1950 was 25 cents a gallon. YES! That's a fact - four gallons for a dollar! Amazing isn't it? Do you really think that's cheap? Well, do you know that at today's dollar value, that 25 cents equates to approximately $1.93?!?!

No kidding - people paid the equivalent of $1.93 per gallon 54 years ago!!! Now that's amazing.

Still, you won't hear the media hype that fact, will you? No, certainly not - they have to key on the raw number of the disgustingly high figure of $1.74 because it lends credit to the notion that President Bush and his "oil buddies" are somehow profiting from this. The oil companies' profits are not increasing, however. They have to pay more for crude oil, which is why the price has risen. The profit margin remains about the same. Sometimes, their profit margin actually drops with increasing crude oil prices.

Want to get an idea of just how little we have to complain about? Here are the European premium gas prices, calculated in U.S. dollars including taxes, as of 15 March 2004 compared to ours:

Belgium $4.73 France $4.78 Germany $5.08 Italy $5.02 Netherlands $5.64 U.K. $5.27 U.S. $1.91

Do you still think we pay too much for gas?

I wonder if those complaining might be some of the very same people who do not want us to increase our own oil exploration and production? I suspect many are. If we did expand our production, we would be much less reliant on foreign oil and mush less impacted when they cut their production and prices rise. The days of oil companies recklessly raping the land to exploit oil deposits have long since been gone. Today, we can drill for and extract oil with so little impact on the environment that it's hardly worth mentioning. Still, that fact falls on the deaf ears of the environmental activists, many of whom cling to the notion that by driving their 25 year old Volvo wagon, they are making a sublime statement and are somehow doing something good for the environment. That old dinosaur vehicle of theirs spits out far more nasty pollution than the largest modern SUV - and doesn't get much better mileage either. Try to convince one of them of these facts though and see what kind of obstinate, belligerent reaction you get! And those kinds of people have the nerve to complain about someone else? Come on, now!!!!

Next time you go to the pump and cringe when you see the price, remember all these facts. Next time you hear someone else complaining about gas prices, inform them of these facts - like most Americans, they probably just don't know better.

[AntiGuv]

How did you estimate today's value of a 1950 quarter? I'm just idly curious what measure you used.

Good post!

[John Thornton]

If anyone thinks oil companies make obscene profits on gasoline sales, all they need to do is buy stock in those companies to share in those outrageous profits.

[Citizen Tom Paine]

How about reporting the retail price of gasoline without the state and Federal taxes?

[Bikers4Bush]

"Fact: Our national average gas price in 1950 was 25 cents a gallon. YES! That's a fact - four gallons for a dollar! Amazing isn't it? Do you really think that's cheap? Well, do you know that at today's dollar value, that 25 cents equates to approximately $1.93?!?!"

Fact: in 1950 the average commute to and from work was far lower than it is today hence less gas used and needed. In addition, many families only owned 1 car since it was possible to support a family on one income. So while it may be cute and fun to extrapolate the figures from 1950 forward to today let's be sure to extrapolate all of them and get a TRUE picture.

That fact is that U.S. consumers are being gouged by the oil companies and run roughshod over by OPEC (odd that we go after Microsoft but not OPEC).

If Microsoft is guilty of keeping the competition down then certainly OPEC is as well.

[Bikers4Bush]

And yes, I do still think we are paying too much for gas.

[CyberSpartacus]

Also remember to mention that at least 50 cents of that price is Federal Tax

[Iscool]

Obviously you own a gas station...Do we give a flip what they do in Europe??? A lot of people in China can only afford to eat rice...Without the stir-fry...Is that something you advocate we do also???

Slovakia could not win a war in Iraq...Likely France couldn't either...Even combined with Germany and Spain...So what's gas cost in Slovakia???

[Iscool]

If anyone thinks oil companies make obscene profits on gasoline sales, all they need to do is buy stock in those companies to share in those outrageous profits.

When the gas price on Wednesday is $1.55 and Thursday it goes to $1.81, which it did and does here, and Sunday night drops back down, week after week, we KNOW we are getting robbed and yes, someone is making a killing...

Maybe you stock holders aren't getting your share, but someone's gettin' it...

[Grit]

Excellent post, Don. Regardless of the hostile response from some...

[Alberta's Child]

That fact is that U.S. consumers are being gouged by the oil companies and run roughshod over by OPEC (odd that we go after Microsoft but not OPEC).

1. There was a report last week that investors are generally disappointed in the profits posted by U.S. oil companies. If that's the case, then it's hard to make the case that these companies are "gouging" anyone.

2. OPEC is an international cartel, and therefore is not subject to U.S. anti-trust law. What do you expect the U.S. government to do -- embargo imports of OPEC oil? Yeah, that sounds like a great career move.

3. There are two basic reasons why gasoline prices in the U.S. are so high: rising demand in the face of limited supply, and a U.S. dollar that has lost a substantial amount of value against nearly every foreign currency over the last couple of years.

[tpaine]

John Thornton wrote:

If anyone thinks oil companies make obscene profits on gasoline sales, all they need to do is buy stock in those companies to share in those outrageous profits.

______________________________________


Anyone who thinks oil companies share much of their profits on gasoline sales with stockholders is very naive.

[Grit]

AG, Here is a link to some inflation calculators...

http://www.jsc.nasa.gov/bu2/inflate.html

The first one on the list shows a 1954 quarter = $1.71 (2003). I'd say Don's numbers are pretty close.

[Grit]

1950 quarter = $1.91 (2003). I don't know where I got 1954 in the above post(?)

[Alberta's Child]

When the gas price on Wednesday is $1.55 and Thursday it goes to $1.81, which it did and does here, and Sunday night drops back down, week after week, we KNOW we are getting robbed and yes, someone is making a killing.

Hint: Go fill your car up on Tuesday.

[dalereed]

"Fact: Our national average gas price in 1950 was 25 cents a gallon"

In 1952 I was paying 13 cents/gallon for gas in Los Angeles and it didn't go to 25 cents until the early 70s!

[Lokibob]

AT $1.74 it is still cheaper than milk, water, and soda pop.

[Alberta's Child]

Anyone who thinks oil companies share much of their profits on gasoline sales with stockholders is very naive.

What do they do -- hide the money in their mattresses?

[Glenn]

You are so full of it.

Gasoline in 1971 was 19.9 cents per gallon. Extrapolate from there.

And the argument that other countries pay more so we should not feel bad for paying more is pretty lame.

[MrB]

many families only owned 1 car since it was possible to support a family on one income

Once again proving that socialism, with its high burden on producers, is inefficient and bad for the environment and the economy.

If the enviros weren't just watermelon commies, they would support lowering of the tax burden to the point that we could all live with one income and one car.