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Gasoline Prices Historical and Today |
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Check today's U.S. gas price by typing "US" into "Enter a State" at the right.
Compare today's price for Regular to the all-time high. (Most accurate graph.)
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What's in the new Energy Bill?
On the gasoline front the big ticket item is subsidies for ethanol—as usual. Archer Daniels Midlands owns 7 ethanol plants with a production capacity of 1,103,000,000 gallons per year. The ethanol tax subsidy is 51˘/gallon, so that comes to $562,000,000/year. (Now there's a lobbying effort that paid off.) But we need energy independence, right? Unfortunately, using ethanol costs $7.87 to reduce fossil fuel use by the energy in a gallon of gasoline. And no, most of that money does not turn into ADM profit, it's just used up making something that's too expensive. But they do turn a good profit while soaking up 1/3 of the ethanol subsidy.
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Now what about those hybrid-car tax breaks of $1700--$3000 per car?
Toyota figures it can get a $2400 subsidy on one of its great new hybrids that get about 50 mpg instead of about 25 mpg like most of us get. Driving 100,000 miles over the life of the car saves 2000 gallons so that's $1.20 per gallon saved. And that savings requires no nitrogen fertilizer. It also helps to jump start one of the best new technologies out there.
How much money will be spent on hybrid tax breaks? There's a limit of 60,000 cars per company; figure 6 companies and $2400 average, that's $864,000,000. But that's for four years, 2006--2009, not per-year like the ADM subsidy. Why the limited budget on a much better deal? Because no American car companies can sell more than about 60,000 hybrids in that time. If they had expanded the program, Toyota, which will sell 100,000 hybrids in 2006, would not run out of tax breaks in August of the first year. These tax breaks encourage conservation, but like the ethanol subsidy, their purpose seem more to help corporations.
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Oil-Company Profits
The price-at-the pump is the sum of all the input costs plus, perhaps, some additional markup because of market power. We can tell if there's market power by check the price increases.
Because there are 42 gallons / barrel, when the price of oil goes up by $10, say from $55 to $65, the price of gas should go up by $10/42 = 24˘ (popNote). It’s actually gone up faster than this, so we know oil companies are exercising some market power and passing through a “markup” not just their actual costs.
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Ever wonder how we got leaded gas and how we got rid of it?
Here’s an interesting chapter in that saga:
A year after the National Academy of Sciences reported that leaded gasoline is the largest single source of atmosphere lead, the Reagan administration’s Task Force on Regulatory Relief (chaired by Vice President George H. W. Bush) proposed abandoning the phase-out of leaded gas.
But then, the EPA Administrator Ann Gorsuch admited to a gas refiner that the agency would not enforce lead limits. The resulting bad publicity prompted a reversal of the Bush Task Force's proposal to abandon, causing an unplanned speedup of the leaded gasoline phase-out.
Exposure to lead negatively affects children's cognitive development and behavioral skills. Between 1976 and 1980, as the amount of lead in gasoline dropped 50 percent, blood-lead levels in children dropped 37 percent. The decline continued. Read the whole story here.
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Documentation (popNotes):
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Accuracy of the Graph
You may see inflation-corrected graphs using CPI-U, the urban consumer price index. They will show a lower price in 1981. Graphs made with the GDP deflator, a more general indicator or inflation will show a higher value.
This is the most accurate graph of gas prices available because it relies on the new "chained" consumer price index. The chained CPI-U shows somewhat less inflation than the traditional CPI-Urban, but more than the GDP deflator. In today's dollars, the all-time high of $2.69 was reached in March 1981. This reflected the all-time high oil price which occured at the start of the Iraq-Iran war a few months earier. Prices are DOE's US average prices for all formulations of regular gasoline.
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How Much Oil to Make Gasoline?
As one reader pointed out, although a barrel of oil contains 42 gallons, it makes only about 21 gallons of gasoline. So, you might think that a $10 rise in the price of oil would cause a $10/21, or 48˘ rise in the price of gas. This would be right if the whole 42 gallons of oil were used up. But the barrel of oil makes about 21 gallons of other fuels, like home heating oil, etc.
This means a gallon of gasoline should only need to go up in price by 1/42 because a gallon of heating oil will also go up by 1/42 of the rise in the oil price.
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![](https://web.archive.org/web/20050923171110im_/https://zfacts.com/metaPage/lib/Unger.gif")
Amazon
House of Bush, House of Saud The seeds for the "Age of Terrorism" and 9/11 were planted 30 years ago in what, appeared to be savvy business transactions that translated into political currency and the union between the Saudi royal family and the extended political family of George H. W. Bush.
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