Gas Prices

As gas prices increase around the country, we begin to hear more complaints about the cost of fuel. I felt it was necessary to put gas prices in perspective.

True, we are paying more per gallon now than we have since the 70's. However, to truly understand what we pay for gas, we must look at the cost of fuel per mile driven. Since today’s cars are more fuel efficient than they have ever been, we actually spend less on fuel per mile than we did in the 50's, a time of very low gas prices and very high economic growth.

In 1955, gas prices were $0.25 ($1.63 in 2003 dollars), and the average fuel economy (cars only) was 15 mpg. The cost of fuel per mile driven ($ per gallon/miles per gallon) was $0.108

Today, gas prices are $2.00, and the average fuel economy (cars only) is 28 mpg. The cost of fuel per mile driven is $0.071

That is a 34% improvement. For someone who commutes an average of 40 miles a day, that comes to a savings of $438 a year over 1955 prices. Gas prices would have to reach $3.02 per gallon in order to reach the same cost of fuel per mile driven as 1955. Of course, if gas prices did reach $3/gallon, most of us would switch to gas-electric hybrids that get 50 miles per gallon. Our cost of fuel per mile would be $0.060 then.

Note: I have not been able to verify the figures I’m using, but I’m fairly sure they are accurate. If someone out there can provide me with more accurate figures, then please let me know.

–J.E. Heath
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