The piece serves up data showing that the increase in the price of gasoline from 2000 to 2008 is overwhelmingly due to the rising price of crude oil.
In addition, it shows where current gas prices fit historically:
• Gasoline prices are currently at both nominal and real highs since 1920. Before 2008, the real price of gas was highest in 1980, when it cost $1.25 per gallon in nominal dollars ($3.29 in 2008 dollars). The previous peak was in 1922, when it cost $3.22 per gallon in 2008 dollars ($.25 in nominal dollars).
• The real price of gasoline hit rock-bottom prices in 1998 and 1999, when a gallon of gasoline cost $1.10 and $1.19 (2007 dollars) per gallon. This is the lowest gasoline prices have been since 1920.
What also needs to be kept in mind are the various factors that go into the price of crude oil, including expanding demand in developing nations; the fall in the value of the dollar; inflation and inflation expectations; political uncertainties at home and in other oil producing regions; war; and governmental regulation (current and threatened), taxes and restrictions on energy exploration and production.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
No comments:
Post a Comment