How have gas prices changed over time?

I always get a kick out of people making predictions about what gas prices will be at some point in the future. Drudge had a prediction up that gas prices would reach $5 per gallon by Memorial day. If that were true, the price would already be at that level. If you really thought that gas would be at $5 a gallon at the end of May, it would pay for gas companies to store gas that would have been sold today and keeping putting it aside until the current price were equal to the future expected price. Of course, doing that would lower the future price at the same time it raised the current one. To do anything else would be essentially leave money on the table.

Click on figure to make it bigger.
The source for gas prices is available here.
The source for the CPI is available here from Table B–62.

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Blogger TooMuchTime said...

What caused the price to dip so drastically from about the second quarter of 2008 to about the third quarter of 2008? Is that when President Bush opened up the off-shore oil drilling permits?

4/12/2011 1:30 PM  

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