Gasoline Price Changes - Federal Trade Commission

GASOLINE PRICE CHANGES:
Price (Cents per Gallon Excluding Taxes)
250
200
150
100
50
0
1978
1979
Source: EIA, BEA
Figure 3-2: U.S. Annual Average Nominal and Real Gasoline Prices, Excluding Taxes
(1978-2004)
Nominal Price
Real Price
(2004 Dollars)
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
In 2004, the national annual average retail price per gallon of gasoline rose sharply to
$1.44. Adjusted for inflation, this is the highest national annual average retail price per gallon
since 1984. Nonetheless, the 2004 national annual average retail price per gallon of $1.44
remains well below the 1981 high of $2.10 per gallon, as well as the annual averages of $1.83
and $1.58 per gallon in 1982 and 1983.
In sum, Figure 3-2 shows that the annual average retail price for regular gasoline in the
U.S. – adjusted for inflation and excluding taxes – did not rise above $1.20 per gallon between
1986 and 2003. Relative to earlier periods, these average prices, in general, were surprisingly
low.
B. Real and Nominal Annual Average Retail Gasoline Prices in the U.S.,
Including Taxes, from 1978 to 2004.
Adding state and local taxes to the data confirms the observation above that state and
local gasoline taxes can add a significant amount. For example, from 1991 to 2004, at the
national level, taxes averaged 30 percent of the total retail price. For 2004, the real annual retail
price per gallon of gasoline excluding taxes was $1.44, but if taxes are included, the price was
$1.85. This is still just about $1.00 below the 1981 national annual average retail price per
gallon – including taxes – of $2.94, however. See Figure 3-3, showing Monthly Regular
Gasoline Prices, Nominal and Real. Figure 3-3 uses monthly data rather than annual data to
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FEDERAL TRADE COMMISSION, JUNE 2005