Gas Prices a retrospect

Just a little thing I found interesting. In 1956 gasoline cost $.25 a gallon, and the average American wage was $1.00 an hour. So it took 1/4 hour to earn a gallon of gas. Today gas averages $3.00 a gallon, and the average American wage is $12.00 an hour. SO on an average scale we are exactly where we were in 1956 on gas pricing, so the problem is?
I still remmember paying $.25 a gallon when I first started driving, by then gas taxes started going up, our public trans system was failing, and everyone had to have thier own 8-12 mph car. And when the unforseen rise to $1.00 a gallon, and a general shrug of shoulders and we drove on.

Damn I'd kill to get .25 cents a gallon.

stratoaxe wrote: Meh, I just pay it and drive. Nothing else I can do about it.

Are you just going to keep making gas threads or what?

It's not a hortage of oil, it's a shortage of refining capacity. New refineries take a long time to approve, and growth has been slow. Plus gas tax is a very significant part of it.

ANARCHY_SCOUT wrote: Damn I'd kill to get .25 cents a gallon.

what he's saying is it's all in proportion. the same reason why your great grandpa could get into a movie for a nickel, BUT he didn't get paid as much to begin with, so it all evened out. of course you could kill for 25 cents a gallon, because you probably make $9+ an hour.

I think gas was about $1.20 when I started driving.

That is an increase of 95 cents from OldSoldier's proposed 25 cent 1950 price.


...And that was three years ago.

Why did it increase $1.85 in three years?




Edited by Tae Kwon Do - 27 May 2007 at 1:28pm

If we all had CCWs then this highway robbery would stop.

usafpilot07 wrote: If we all had CCWs then this highway robbery would stop.

Amen.

Some thoughts:

1.  I am not familiar with the particular numbers that OS describes, but numerous studies have been done illustrating how gasoline prices are only now at or near all-time highs when adjusted for inflation.  Gasoline prices (in the US) have been lagging inflation for decades.

2.  Being ahead or behind inflation is a decent indicator for an "expected" movement range for prices, but many prices stray far from inflation for market reasons:  Prices for TVs and DVDs, for instance, have not kept up with inflation, while prices for bottled water have outpaced inflation over the last few decades.  Inflation is the "average" price increase - inflation follows prices, not the other way around.

3.  Reports of the "record" profits of oil companies are misleading.  Yes, oil companies have made massive dollars/quarter the last couple of years, but (a) these numbers are not inflation-adjusted, and (b) they fail to consider profit margins. 

4.  In 2006, for instance, BP's net profit margin was 8.6%, and Exxon's was 10.46%.  Those are above average profit margins, no doubt, but (a) much higher than they have been in the past for oil companies (oil companies are what investors call "cyclical stocks" - they go up and down), and (b) these profit margins are much lower than some other sectors, like pharmaceuticals, high tech, banks, and telecom.  Apple's profit margin is 14%; Ebay's is 20%.  Calling the profits of oil companies "ridiculous" is uninformed - the oil business is not extraordinarily profitable, relatively speaking.