The Mudcat Café TM
Thread #68183   Message #1202326
Posted By: Strick
07-Jun-04 - 06:31 PM
Thread Name: BS: Why is gasoline so expensive?
Subject: RE: BS: Why is gasoline so expensive?
Strick, using the first four items from the website you cited, I ran the figures through the Consumer Price Index calculator here.   The increase in the CPI, assuming that the prices cited in your website were current as of the last time the site was updated (December 26, 2002 when I visited it a few minutes ago), at the end of 2003 (the last year for which inflation figures are available) the items would cost, per gallon:

Coffee: USD 0.72
Unleaded gasoline: USD 1.42
Kool-Aid: USD 1.89
Clorox: USD 2.25

Without running out to my car and checking, I believe was paying USD 1.60 for a gallon of unleaded petrol at the end of December, 2003. (And why would I buy a gallon of Clorox bleach when the house brand would work and about USD 1.00/gallon cheaper?)

This is NOT to say that petrol in the US is not cheaper than anywhere else -- it is. But I don't think that the increase can be attributed solely to the average increase in the CPI, either.


Sorry I didn't get back to this thread and see this, Rapaire. The current increase in prices has nothing to do with the CPI. It's mostly a risk premium, along with the effects refinery constraints and some people speculating on crude prices. Without those factors the price would be more inline with inflation. Remember that not everything moves in lock step with the CPI, which can be a flawed measure (I rather use the GDP inflator for example) and for many, many years gasoline prices didn't even remotely keep up with inflation. That's mostly what the link I posted was trying to say, that gasoline prices are largely independent of the CPI and for most of the last 20 years it was grossly under inflated.

Todays prices (well, prices up to the break in price of crude late last week) are a temporary aberration.