Date: 2024-09-19 Page is: DBtxt003.php txt00021289
US Economy
US Retail Gasoline Prices
EIA ... Retail Gasoline Prices from 1993 to 2022 ... All grades all formulations
Original article: https://www.eia.gov/dnav/pet/PET_PRI_GND_A_EPM0_PTE_DPGAL_M.htm
Burgess COMMENTARY
Thr retail price of gasoline is a good proxy for the cost of transportation for consumers. Over the past 20 years the price has increased from a little less than $1.00 a gallon to more than $3.00 a gallon.
If you go back another 20 years to before 1973, the price of gasoline was much lower. I had a long commute in New Jersey back then and used to fill up my big gas-guzzling V-8 Dodge Polara paying just 27 cents a gallon. When Bill Bradley was running for President in 1979 I remember him saying that the price of gas would never go beyond a dollar a gallon ... 'the people would never let that happen'. So much for the power of the people.
During 2021 there has been an inflationary spike in consumer prices, including the retail price of gasoline. I am bothered by the fact that the media and political leadership do not reference the reality that the price is at this level because the major actors in the oil industry understand that they can charge these prices in a 'demand pull' economy but need not if they would be satisfied with a reasonable profit rather than the absolute maximum profit.
As I see it, profit is a big part of the cost in the supply chain. By the time a product (like gasoline) is purchased by the consumer the embedded profit is huge. The same goes for almost everything a consumer wants or needs to buy. Most of the commentators that talk about inflation, rarely mention the issue of the cumulative embedded profit in almost everything that consumers have to buy!
Peter Burgess