Gas Prices History

In today's age of economic uncertainty, we all have felt the pinch of unusually high rising prices of fuel. We can't help but wonder about the gas prices history and the reason for this incessant rise. Studying gas prices history not only helps us understand the reason for gas price rises in history, but also helps financial professionals understand the direction in which the prices will go in the future.

Gasoline to America is like water to human beings. According to the Motor and Equipment Manufacturer's Association, an average American drives nearly three million miles per year. The amount of traffic on the roads clearly indicates the need for gas and a shortage of gas can almost bring America to a standstill.

To all of us, it seems like the prices of gasoline have no reason to behave like a roller coaster, but experts believe that the wavering trends of gas prices are based on the history of gas prices and the increasing demand in today's world. Though this is not an exact science, because most of the gas resources are tied up with large corporations who are just interested in making a fortune.

Today the world is being supplied with 85 million barrels of oil per day. United States alone is supplied with 20 million barrels of oil per day. Also, no major oilfields have been discovered since the 1970s. Most of the oilfields are at their peak, where supply is concerned and with the ever increasing demand for gas, it is but obvious that prices will keep increasing.

History of Gas Prices

Let us take a look at the gas prices history in United States and try to find out why are gas prices so high?

In the fifties, the gas prices in United States were extremely cheap. The main reason for this was that United States did not have to import oil from any other country, it was self sufficient. The average price of gas was around $0.19 to $0.26 per gallon. Though it might seem really inexpensive, we have to take into consideration the pay scale and the value of a dollar in those days. Experts believe that today's gas prices, even with the recent rise, is the same, if not less than what people used to pay in the 1950s.

In the 1970s the price of gas was between $0.36 to a little under $1. It never exceeded $1 even during the infamous 1970s oil crisis, the Vietnam war and the Watergate scandal. Though it was difficult to find gas during that time, the price was almost always constant. This was mainly due to government price control.

In the 1980s things changed for the better. The price of gas was increased though only nominally. You could get a gallon of gas for just a little above $1 and you could also fill up your car anywhere. For a few years after 1980, the prices have remained stable except during the time of Iran-Iraq war, where the prices skyrocketed, but then slowly settled down. The price of gas in 1980s was actually cheaper than getting a burger or watching a movie. Until 2005, the prices actually remained stable. The prices in 2005 increased due to a number of reasons like hurricane Katrina and increase in the price of crude oils. On 5th September 2005, the prices were as high as $3.07 per gallon. But by December 2005 it settled down. The highest ever price recorded was in July 2008, when the price hit the $4.06 mark. This affected everyone to a great extent and people actually started driving less and using public transport. But in December 2008, the prices dropped to $1.65 a gallon. This year the price of gas is comparatively stable in the range of $2.45 to $2.70. However, there are debates of whether the prices will remain low. Some experts believe that gas prices will increase drastically in 2010. The table below will help you take a quick look at the gas prices history over the years.

Decade	Average Price(per gallon)
1950 - 1959	$0.19 to $0.26
1960 - 1969	$0.31 to $0.35
1970 - 1979	$0.36 to a little less than $1
1980 - 1989	About $1
1990 - 1999	About $1.10
2000 - 2009	$1.65 to $4

The gas prices history shows us that the fluctuation in the prices is not always because of limited supply of gas. There are various other factors involved, such as the energy policies we make, wars, government taxes, crude oil markets etc. While cars are our lifelines, it would be a great thing for the environment, if each of us could make a conscious effort to save our resources by carpooling or by coming up with ways to improve gas mileage or looking into alternative fuel options.