Gas Is More Expensive, But Still Cheap

Though Americans are complaining about rising gas prices, demand has barely budged. And when adjusted for inflation and considered as a percentage of household spending, prices are still below the peaks in the 1970s and 1980s.

1 minute read

May 24, 2007, 9:00 AM PDT

By Christian Madera @http://www.twitter.com/cpmadera


"Gas prices have climbed the last three months and now top $3 a gallon in many places. That's putting pressure on household budgets as Americans head into the summer vacation driving season."

"[But] in fact, motorists are spending less -- on an inflation-adjusted basis -- than they did in March 1981, when prices reached a record high.

Also, as a percent of household spending, gas is a better deal now than then.

Gasoline and oil purchases accounted for something more than 3 percent of spending in 2005 and 2006 -- down from the high of 5 percent in 1981, according to the U.S. Commerce Department."

"Want gas prices to fall? Use less.

"If half of American drivers pledged, and followed up on the pledge, to use one gallon less gasoline in the month of June, the market would plunge," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J."

Wednesday, May 23, 2007 in Pittsburgh Post-Gazette

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