Yikes! Gas actually is more expensive
SEE RELATED:
My office is decorated (I use this term loosely, as others might refer to it as “cluttered”) with automotive stuff. Aside from vintage calendars and posters there’s a penny/nickel parking meter, gas station air dispenser, traffic light, bumper jack and a 1940s gas pump, all of which I’ve obtained from various junk piles and fully restored using the same equipment that I utilize on classic car projects.
The gas pump is finished in the Calso brand, a name not terribly familiar to most folks in the East. Calso was the brand of the California Oil Company until the late 1950s, when it was changed to Chevron. The face of the pump shows a typical fill-up with premium gas during the mid-1960s; 13.7 gallons at 31.5 cents per gallon for a total of $4.32.
I was looking at the pump face the other day and realized that the total fill price is now what we’re paying for a single gallon of precious fuel. This got me to thinking about what today’s gallon of gas would have cost in earlier decades if calculated in constant dollars. Until about a year ago we routinely heard the talking heads on TV telling us that gas is actually a bargain, when prices are adjusted according to consumer price index tables.
That might have been true, but I grabbed a constant dollar conversion chart from the University of Oregon’s Political Science department to see how things work out these days. Now I know why we don’t hear the talking heads anymore. It’s not pretty…
Using $4.00 as a typical price per gallon today I went back in time to see what it would have cost “way back when.” In 1950, when gas actually sold for 15-20 cents, the price would have been 50 cents. In 1960 that price would have escalated to 62 cents, which is two-to-three times what gas really cost in that year. In 1970, when premium gas typically cost 35 cents, today’s price calculation brings it to 79 cents. By the way, a barrel of oil in 1970 sold for $3.00 in the world market.
Things get no better by 1980, when the price of a gallon sits at $1.58 in today’s dollars, and in 1990 the price would have been $2.52. It climbs to $3.32 in 2000, which is easily a dollar more than prices really were just 8 years ago. Things are really bad these days, but probably wouldn’t seem quite as shocking if prices hadn’t escalated so quickly. I blame greedy speculators, but the experts will eventually figure out the chain of events.
Unfortunately, I don’t have any good news to give or much of a conclusion to draw. Everyone is going to adjust to higher prices in his/her own way and it’s sure to change a number of things in our society. On the bad side, everything we buy will cost more because it had to be transported by truck to where we bought it. It will cost more to heat and cool our homes, eat at restaurants or just have our trash collected.
On the good side, the new economy will force us to stop wasting things, from water to reusable packaging to using the oven to warm the plates. SUVs - big ones, at least - will get parked or just go away, fuel-efficient new vehicles will replace them and routine errands will be thought out beforehand to minimize fuel usage. Most of us won’t have a life change so much as a life style change. The things we stop doing or stop using are probably the things we didn’t really need in the first place.
