Historical Gas Prices By Year: What Affects Them [1978-2024] (2024)

Gas price has gone through a few sharp and unpredictable swings over the last few years. If you often get gas-filled in your vehicle, you must know how volatile the prices can be.

From season to season and region to region, there have been many fluctuations in gas prices. However, certain factors change the direction of the gas price. Do you want to know what has caused the gas price to go on a rollercoaster ride?

In this article, we will tell you how much gas rates have varied over the last two decades and what factors are affecting them. Moreover, you’ll also know how to calculate the adjusting price for inflation on your own. So, without further ado, let’s get right into it.

At A Glance: Statistics of Gas Prices

In 2014, the gas price was at its peak at a rate of $3.62 per gallon. Although it decreased in 2013, it still was over $3. The prices fell to $2.43 per gallon in 2015 and $2.14 in 2016. Compared to the previous years, in 2019, gas stations charged $2.6 USD per gallon. However, in 2020, the price was 2.17, which means the price went down by a total of 17%.

Update: The Gasoline price in 2022 was recorded at $3.99 per gallon on October 3rd, 2022. Although it is higher than the previous year, which was $3.3 per gallon, it is still cheaper than the global gas prices, which even hit $4.6 per gallon.However, the prices vary greatly across the states in the U.S. For Instance, in California, the prices are 50% higher than in other states, which equals $6.3 per gallon. At the same time, the Midwest and South are 5% to 10% less than the overall price.

Read through the gas prices infographic.

Gas Prices By Year

The chart below shows the average gasoline cost per year based on adjusted inflation in 2020.

The table shows the average gasoline cost per year based on adjusted inflation in 2023.

The highest fuel prices were in 2021, with the average being $4.69 for California and $4.34 for Hawaii due to the shutdown of the Colonial Pipeline caused by a cyberattack.

What Are The Factors Determining Gas Price?

Have you ever thought about why the gas price in your state is different from the price in other states? Here we will tell you about the 6 factors that often push the gas price up or down.

Oil Supply

Crude oil is the most significant factor affecting the direction of gas prices. The price you pay for gasoline is determined by crude oil. This type of oil is easy to refine because it contains very few impurities. Heavy or thick oil has a massive amount of pollutants. Therefore, it is challenging to get refined as well.

Since sweet/light crude oil is hard to access, you’ll notice its price to be high. On the other hand, sour/heavy oil is globally available, so its price is much lower than sweet/light crude oil.

Consumer’s Demand

Over the last few years, the world’s population has increased dramatically. The more people, the more likely they drive cars and trucks, so more gasoline is required. Let’s take China and the U.S. as an example.

China built more than 80,000 miles of interprovincial highway in 2020. On the other hand, the U.S. has 47,000 miles of interstate highway. These numbers indicate that more people would drive vehicles and use gasoline, thus increasing the price of those specific areas.

Inflation

Inflation is the rate at which the prices of services or products increase. You can also call it the annual product or service price growth. Inflation and gas price have a directly proportional relationship, So when one rises, it also leads the other to increase.

Suppose, in January 1950, a gallon of gasoline cost 20 cents in the US. Adjusting the inflation, in January 2020, if the taxes, demands, and supplying state remain the same, the rate would increase up to $2.89.

Taxes

Sales taxes and taxes applied by municipal or local governments can also affect the price of gas. For one-gallon motor gasoline, the excise tax is 18.30 cents the fee for the federal leaking underground pump is 0.1 cents, which makes the federal tax 18.40 cents per one gallon of gasoline.

Refining Cost

In the United States, refining costs vary according to seasons and regions, based on crude oil and oil refining technology. Moreover, the price of gasoline also differs due to the ingredients blended with the oil, such as fuel ethanol.

Distribution and Marketing

Marketing, distribution, and retail dealer costs also affect the price of gas. Usually, gasoline is shipped from refineries to the terminal in an area which is then transferred to the gas stations in that Pacific area.

Although few refiners operate or own retail outlets, few individual businesses purchase gasoline from marketers and refiners and sell it to the public. The gas price also changes based on the marketing strategy used by the gas station owners. For example, if the other gas stations in the area are charging high, they would keep their price lower to bring more people in.

Moreover, the prices also depend on the location of gas stations. If there are multiple gas stations in a single area, the competition becomes very high. At the same time, if there are just two gas stations, the competition is comparatively low. Gas prices also vary based on other factors such as salaries, wages, equipment, rents, lease, and benefits.

Check Out How Gas Prices Work:

Calculating Gas Adjust Prices for Inflation

Adjusting the price for inflation will give you an idea about the actual growth or seasonal fluctuation in the cost of gas. Here is how you calculate inflation to know how much the gas price has changed over time.

The formula to calculate adjusting the gas price for inflation is as follows.

1998 Gas Price x (2023 CPI for Gas / 1998 CPI for Gas) = Adjusted Gas Price in 2023 Dollars

However, remember the following things while calculating the gas price.

• The average price of one-gallon gasoline was $1.12 in 1998.
• The Annual Average CPI for all types of gasoline was $91.60 in 1998.
• The annual average CPI for all types of gasoline was $194.13 in 2020.

Now let’s put the numbers in the formula.

$1.12 x (194.13 / 91.60) = $2.40

Cost Of eGallon Over The Years

An eGallon compares the amount of energy it takes to fuel a car with electricity with the amount of energy to fuel a car with gasoline. According to the Department of Energy, an eGallon costs about $1.00 to drive an electric vehicle, the same distance as a gallon of gasoline costs in a conventional car.

Some people believe that the cost of an eGallon is understated, as it does not take into account the cost of maintaining and repairing an electric vehicle. However, the Department of Energy argues that electric cars’ maintenance and repair costs are often lower than gasoline cars.

Overall, the Department of Energy believes that the cost of driving an electric car is cheaper than driving a gasoline vehicle, even considering the maintenance and repair costs.

From 2015 to 2021, the average eGallons price per state has been varying greatly. In 2015, the highest average price was in Alaska at $0.42/eGallon, while the lowest was in South Carolina at $0.20/eGallon.

The trend has generally been for prices to increase over time, with the highest average prices in 2017 and 2018. However, there has been a slight decrease in the average price from 2018 to 2021. The states with the highest average prices in 2021 are currently Hawaii at $0.60/eGallon and California at $0.58/eGallon.

The table below displays the average eGallons price per state.

Check Out Are Are Electric Cars REALLY Better for the Environment?:

FAQs

How much has gas ever cost at its highest price?

According to the US Energy Information Administration, the highest gas price was recorded on July 16, 2008, reaching $4.10 USD per gallon. But, this was not a global high – gas prices were much higher in some countries. The highest gas price ever recorded was in Venezuela, where it reached $7.50 per gallon in 2013. However, with the current global oil prices, it is unlikely that gas prices will reach these levels again in the near future.

How Much Did Gas Cost A Year Ago?

In 2008, the average gas price was about $3.50 per gallon. Although this price is much higher than the current average gas price, it is significantly lower than in previous years. For example, in 2000, the average gas price was over $1.50 per gallon more than in 2008. Despite the high gas price, many people continue to rely on their vehicles as their main mode of transportation.

Gas prices in 2023: What can we expect?

According to the EIA, the gas price will increase to $3.6 per gallon.

Final Consideration

Natural gas is only available in a certain quantity. Therefore, constrained supply and rising demand for gasoline have made people suffer a lot these years. Seasonal demands, the value of the U.S. dollar, and refining costs are a few reasons that cause the gas price to hit a plateau.

Moreover, the gas price probably rises in the peak summer and spring because it’s the travel season, and the gas is more likely to evaporate. On the other hand, in winter, the prices are comparatively low. Now that you know when and why gas prices increase, you should always be prepared for sudden price fluxes.