Retail Gasoline v. Superbowl Tickets…a Fool and his Money
In 1966, wholesale gasoline cost around $0.15 a gallon (nominal) according to data from the BLS. Prices have grown at an annual pace of 6.2% since then, peaking at $3.438 in July 2008. In 2009 prices crashed to $1.78 on the combination of the corrective swing created by the implosion of the 2008 energy bubble, along with the greatest contraction in global economic activity since the Great Depression. Price then bounced back to an average $2.25 last year on the wholesale level and $2.79 on the retail level as the economic recovery picked up steam.
Now, if we adjust the price for the rise in the cost of living, then a 1966 gallon of gasoline should be worth around $1.00 in 2010. It is hard to find retail gasoline prices from the 1960s because the DOE and BLS only provide consumer data since 1976.
However, if we look at the historical relationship between producer and consumer price, we come out to price of around $0.32 a gallon in 1966 or $2.15 in 2010.
As analyzed in today’s issue of The Schork Report, $2.79 at the pump in 2010 seems rather dear, but then again, in 1966 we were putting leaded gasoline in our cars and getting a lot less bang for our buck.
For instance, just before the 1973 Arab oil embargo, passenger car fuel economy was 13.4 miles per gallon. Three oil shocks (1973, 1980 and 2008) later and fuel economy is 22.6 miles per gallon. Furthermore, energy consumption per GDP was 15.40 MBtu/$1 in 1973.