At today’s price of $2.09 per gallon, gasoline prices in the US are the lowest in history, adjusting for increased fuel economy and higher wages as the chart above illustrates.
Well no, the chart above does not illustrate that. First off, the world's first "oil crisis" was before the chart here records. It starts in 1975 when the first dramatic rise in gas prices did not occur until 1973. That was when gas was 23 cents per gallon and suddenly went to double that, and led to lines around the block and the first CAFE fuel economy standards in 1975. So it is playing fast and loose with the facts to say today's prices are at an historic low. They are not.
At the estimated average hourly wage today of $20.82, a typical worker would have to work for 24 minutes to earn enough pre-tax income to purchase the gas required to drive 100 miles, and that brings the “time cost of gas” priced in minutes of work to the lowest level in US history.
But why should we compare prices with this criteria? Why not something like minimum wage or the average person's ability to buy bread and milk? There are all sorts of criteria available, but I can tell you, when gas was 23 cents per gallon, the minimum wage was not less than a dollar. It was probably closer to $1.80.
As Jeff describes it, today’s low gas prices are an impressive tribute to the “marvels of the market”. . .
Despite it all — and despite every effort by the world’s most powerful people — all the pressure is downward.
Trouble is, the forces that drove the cost so high as it was still exist and they will not be dissuaded. Increased use in India and China drove the prices to historic highs, and they will again. There is no stopping the growth of use in lands abroad. Only a move away from fossil fuels can stave off the eventual return of the high prices we've seen the last decade.
"Courage is not just a virtue, but the form of every virtue at the testing point." C. S. Lewis