Gas prices surging, but still below record levels

The cost of gasoline in the United States went up a record 12 cents per gallon during the past two weeks

Factor in inflation, cost still lower than 1981

March 14, 2000
Web posted at: 11:26 p.m. EST (0426 GMT)

From staff and wire reports

WASHINGTON -- Gas prices have surged in the past 12 months, experiencing their biggest dollar increase in the past 30 years, according to a survey conducted for AAA.

Self-serve regular, unleaded gasoline averaged $1.54 per gallon nationwide, according to AAA's March Fuel Gauge Report released Tuesday.

With so many people feeling the pinch of the increasing cost of filling up the tank, some say the public is paying more for gasoline in the United States than ever before. But are gas prices really that high?

VIDEO CNN's Brooks Jackson looks at current U.S. gas prices in relation to prices of the past. Windows Media 28K 80K CNN San Francisco Bureau Chief Greg Lefevre investigates why California has the highest gasoline prices in the United States Windows Media 28K 80K     ALSO How did gas get to be $2 a gallon?     MESSAGE BOARD Rising oil prices

The answer is no. Current gasoline prices are not at record levels, not even close.

Just 13 months ago, gas prices were the lowest ever, after accounting for inflation. The national average price of a gallon of regular gasoline hit a low of 92 cents.

"When you adjust it for inflation, a year ago we were looking at gasoline prices that were cheaper than they had been during the Great Depression," said Daniel Yergin of the Cambridge Energy Research Associates. "So it was an extraordinary bargain."

That was then, this is now.

The average price of gasoline now is up to $1.54, higher than the $1.38 average in 1981.

But that 1981 price of $1.38 translates to $2.29 in today's dollars, adjusted for inflation, according to the Cambridge Energy Research Associates. And that price was, and still is, the highest-ever price paid for gasoline in the United States.

Since 1947, prices have consistently been between $1.30 and $1.50 per gallon in today's dollars, except for the big energy spike in the late 1970s and early 1980s.

Prices for crude oil also show that today's prices are not records. In late 1998, crude oil prices collapsed to around $10 a barrel, a very low price, historically.

Crude prices then tripled to just under $30 a barrel. But the historic high was back in 1981 -- $70 a barrel -- when adjusted for inflation and measured in today's dollars.

A CNN poll shows two out of every five Americans say current gasoline prices are a hardship. Yet Americans keep buying gas-guzzling automobiles such as sport utility vehicles in record numbers.

That may be a contradiction, or it may be proof that gas prices are not that high after all.

Correspondent Brooks Jackson and The Associated Press contributed to this report.

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