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Auto & Travel
AutoMotives: A Short History on Gas Prices The Actual Price of Gasoline: {continued}
The 'real' price of gas at the pump fell below its lowest post-war level in 1998, when the price at the pump averaged $1.06, for an adjusted 'real' price of $1.03. In fact, while the price in January of '98 had been $1.13, by December, it had fallen to below a dollar, at 98.6¢/gal. The price continued to fall through February 1999, when the average price dipped to 95.5¢. A little more than one year later, in March 2000, the average price had rocketed back to $1.54/gal., and increase of some 60%. Of course, this is a national average. ...
Regional Variations: When we're talking the Northeast here, we live in a region third of six, behind the West Coast and the Rockies, for high gas prices. The prices shown here are in 'real' cents/gal., i.e., adjusted for inflation. Actual prices at the pump were, of course, higher.
Nonetheless, you can see that gas prices in the Northeast, shown here at 75.1¢/gal., were about 5.8% higher than the mid-Atlantic price, and more than 10% higher than prices in the least expensive regions -- the Southeast and Gulf Coast. If there's any good news to this, it has to be that the Northeast price is below our fellow citizens out west, where gas prices were about 5% higher in the Rockies, and more than 20% higher on the West Coast and in Alaska and Hawaii. Interestingly, if you look at the data for the Northeast alone, Vermont comes in in the middle, with gas prices in Maine and Rhode Island almost consistently lower, and prices in Connecticut, Massachusetts, and New Hampshire higher.
Where's the Money Go? Of course, whenever gas prices increase so dramatically, the question always arises of who reaps the benefits. The following chart, from 1999 data, shows the breakdown of where the money goes:
As you can see, the cost for a gallon of gas makes its way around. While changes in price, as well as regional factors, can affect these percentages, the chart can still be used as a rough approximation. From it, you can see that more than one-third goes for the crude oil itself, with more than another third going for state and federal taxes. Less than One-eighth goes for refining costs and profits, and less than one-eighth for all other costs, including distribution, marketing, and gas station costs and profits. Whether or not these figures can or should change is probably a moot question. Oil supplies will increase or decrease depending upon consumption and similar patterns. And neither the states nor the federal government are likely to ease the tax burden, since most revenues from gas taxes go back out as investments in highway infrastructure. So ... what does the future hold The Future: Needless to say, everyone was shocked when gas prices not only began to rise, but to rise dramatically over the past 20 months. But what about the future of gas prices? The Energy Information Administration's near-term forecast for national at-the-pump prices for unleaded regular is calling for a slow but steady decrease ... with current prices expected to drop to $1.49 in this quarter, to $1.40 by Q1 of 2001, and to $1.31 by this time next year.
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