Was Gas More Expensive Four Years Ago?

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The price of fuel four years ago has been one of many hot topics discussed during this election year. A dizzying number of factors influence fuel prices, though whoever is in the White House often takes the blame when prices spike.

This year has set records for average fuel prices, but July 17, 2008, when a gallon of regular unleaded cost $4.11, still holds the highest national daily average, according to AAA's Fuel Gauge Report.

Even with 2008's record high and long stretch of days averaging over $4 per gallon, AAA's manager of public relations, Michael Green, predicts 2012 fuel prices will likely be the highest ever on record. The national average for 2008 of $3.25 per gallon — not adjusted for inflation — is lower than the current year-to-date average of $3.65. Adjusting for inflation still puts 2008 at a lower $3.48 per gallon using the Bureau of Labor Statistics' inflation calculator. Prices generally drop near the end of the year, so the yearly average will likely be a few cents lower than current prices, Green says.

Gasoline has remained expensive in 2012 for two reasons, according to Green. The price of oil has been costly all year long, and refinery disruptions have kept regional prices spiked. Tensions between the U.S. and Iran resulted in high prices earlier in the year, and this summer saw pipeline disruptions to the Midwest, Hurricane Isaac affecting refineries in the Gulf Coast and the recent refinery fire in California.

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Fuel prices four years ago started similar to 2012's prices, at around $3 to $3.25 per gallon. The higher to-date average for 2012 is differentiated by oil prices plummeting in late 2008 because of a crashing economy that lowered the demand of oil. Prices dipped below $2 per gallon in late November and continued to fall to a low of $1.61 on Dec. 30, 2008. The lowest price in 2012, $3.27, was recorded on Jan. 1. 
 
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By Joe Bruzek | October 17, 2012 | Comments (9)

Comments 

Marlon

I remember paying $0.89 in 1995, freshman year of college, at an Exxon near campus. I was driving a 1984 Buick Regal at the time.

Ike G.

My question would be, "Are we better off today than four years ago?"

And I'm not sure if we can unequivocally say that we are better off today.

There's plenty of oil in the US, albeit at a price.

And with millions of people unemployed with no place to go every morning, it would seem to me that less demand should result in greater supply and lower cost.

Dan

@Ike,

Global market, my friend, global market.

Lots of people in Asia with lots of place to go every morning. Lots more than there were before. And the increase there is larger than the decrease here. Much larger.

It's kind of amazing that gas prices aren't higher than they are.

Ike G.

Dan, I live in Oklahoma.

We've got oil bubbling up out of the ground here, bud. Ditto with Texas and New Mexico, next door, and the Dakotas to the North.

If we had more refineries, we would be able to refine more oil and export more gasoline and oil products to those people in Asia and elsewhere, making money in the process.

Make no mistake, I think that gasoline/diesel is a bargain at any price and I sure do use more than my fair share of it everyday, mostly hauling and towing a 16-horse fifthwheel trailer behind my 2009 F350 Diesel.

But considering the whole global picture, the US economy, including America's unemployment and all, it doesn't make sense to me that America needs to import any oil from anywhere, since we're floating on so much of it.

So, IMO, the cost of gasoline is artificially kept high because we have an overabundance of the raw materials and in America the demand for gas/diesel is down.

Just doesn't make sense.

O&G

The 'Global market' is wonderful excuse for the ignorance of the masses - not an insult only the truth. I was one of my firms (GS Wall St) top discrete process analyst covering the Oil & Gas industry for the past 17 years. Speculation drives the market much more so than general supply and demand. If you chart back to when former President G.W. Bush announced new open market drilling permits crude dropped 33% in a five hour window. If the US had expansive drilling it would be figured into the market 'spec algorithm' and gas would be in the low to mid 2 dollar range when adjusted for inflation.

Volume Van

The speculators could not increase the price of Coal & Natgas because the supply of those fuels are plenty where as the oil is not.

Every day more than 80,000 new vehicles were sold worldwide and the prices will keep increasing.

So USA does not have much control over Oil prices other than reducing the consumption by using Hybrids, Plugins and vehicles running on Natgas and Biofuels.

No wonder the Hybrids have captured 3% of the US market while Plugins are doing very good.

O&G

"The speculators could not increase the price of Coal & Natgas because the supply of those fuels are plenty where as the oil is not."
That statement alone proves you have absolutely no clue on how the Futures and Options markets operate.

Volume Van

Mr O&G

Futures and Options will also increase price of Coal and Natgas if they can, but they could not because supply is plenty.

You think USA is the only country which uses Oil, Asians continue to suck in more and more and the control is going away from USA.


Saudi's have started their own oil trading company. Soon they will take total control over oil price and leave the speculators in dust.

Day is not far when millions of Alternative Fueled Vehicles will cut down the need for oil.

Right now the count stands at 70 million.

kevingt

This article gets a mixed review. First of all, they correctly point out gas prices were higher in 2008 than they are now. The price of gas peaked higher in 2008 than what it has peaked in 2012. Period. There have also been more days over $4.00/gallon in 2008 than in 2012. That's also correct. The problem comes when they try to compare the annual average price from 2008 to the annual average price in 2012. This does not take into consideration the collapse of the economy which drove the price from over $4.00/gallon in July 2008 down to $1.81/gallon when Obama took office. The gas prices plummeted as the economy went into the tank and the govt had to start bailing out the banks and the credit market froze up. This was a HUGE anomaly which took the annual average well below it would have been if the economy would have continued where it was or if there had been more of a normalized correction, say 20% or so. If gas prices had not plummeted due to the economic collapse, the annual average price in 2008 would have been higher than the annual average price of 2012. So that was an invalid comparison.
Secondly, the price of oil was over $150/barrel back in 2008 compared to $100/barrel in 2012. Blaming this on the price of oil doesn't reflect the much lower price of oil in 2012 versus 2008. It also doesn't account for the fact that we are producing more oil domestically than we have in a years. The other telling fact is that we have become an net exporter of gas for the first time since the 80s. The oil companies have plenty of oil here and we have the capacity to refine the oil here and that's why exports of gasoline have gone way up. The reason that gas is more expensive now is not because of oil or oil supply but because gasoline that could have stayed here in the domestic market is being sold to foreign markets. The gas companies are making record profits by shipping gasoline to foreign markets which increases scarcity here which drives up the price. That's the reason that gas prices are high now. It's not the price of oil or the availability of oil, it's the greed of the oil companies to make greater profits while the American economy suffers.

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