Gas prices are on the rise again, but are they really just one penny below “all-time highs,” as CNN business reporter Carrie Lee suggested recently?
“Up 11 cents a gallon over the past two weeks,” Lee reported on the July 10 “American Morning,” citing a Lundberg survey noting that the $2.995-a-gallon cost was “just less than two cents below the all-time high set last year during Hurricane Katrina.” A minute later Lee said it was “about a penny off from the all-time high.”
That figure is actually 12 cents shy of the inflation-adjusted [1]all-time high of $3.12, reached in April 1981.
But Lee’s math is fuzzy even when not accounting for inflation. The highest average gas price recorded in 2005 was $3.057 in early September 2005, according to AAA’s [2]FuelGaugeReport.com.
What’s more, when adjusted for inflation and purchasing power, according to the Cato Institute’s [3]Jerry Taylor and Peter Van Doren, gasoline prices are drastically lower than 25 years ago.
Taylor and Van Doren wrote that when adjusted “for the change in disposable per capita income, prices would have to be $4.30 today to have an equivalent impact.”
Simply put, concluded Taylor and Van Doren, “Americans are still, on average, economically ahead of the game.”