Nov 30, 2021 - Energy & Environment

Putting gasoline prices in perspective

Inflation-adjusted retail gasoline prices
Reproduced from Energy Institute at Haas; Chart: Axios Visuals

This may be cold comfort to anyone feeling the pinch of higher gasoline prices, but a new analysis explains why looking only at per-gallon costs tells an incomplete story.

How it works: University of California economist Severin Borenstein's commentary offers other metrics to look at prices nationwide and in his state, the nation's costliest.

  • One of them, seen above, is average gasoline prices adjusted for inflation, showing they're far lower than right before the 2008 financial crisis.
  • As a share of median household income, prices are somewhat lower than the average over the last 17 years. Why? Incomes having risen somewhat and cars are more efficient.

Why it matters: Borenstein's point isn't to "well, actually" gas prices. Instead, he argues that focusing on gasoline "obscures the larger social issue."

  • "The problem is rising income and wealth inequality, which makes everything harder to afford, including housing, food, and, yes, gasoline," writes the UC-Berkeley business and public policy professor.
  • "What we need to address is the everything affordability crisis for people being left behind, with stronger social programs, educational options, and job opportunities."
  • "We don’t need to address the gasoline 'affordability crisis' for everyone else," Borenstein writes, arguing that artificially lowering fuel prices is a bad idea from a climate and pollution standpoint.

Go deeper: Read Borenstein's whole post.

Go deeper