Current gas prices make for a good example of issues of supply and demand and the cost of living.
John DeVries, economics and history instructor at Central Lakes College said gas prices provide a good illustration of those factors.
"Not only does it affect the price of other goods, it forces people to cut back their spending for other products," he said.
Going to fill a car's gas tank can mean spending more than $20. But finding the historic perspective of spending is a little more complicated than the price at the pump.
Gas spending came into its own in the post-World War II era after war restrictions were lifted and Americans had money to buy cars. In the 1950s, the average salary was $2,992. Cost of a loaf of bread was 14 cents. Car sales numbered 6,665,800 in the 1950s, according to a study -- by decade -- on life in America.
In 1956, the Federal Highway Act was signed into law for construction of the interstate highway system. And Buick owners and collectors report a 1950 Roadmaster could expect 8 to 12 miles to the gallon. Newer cars have made considerable progress in gas mileage. Test drives on a 1998 Beetle had best fuel averages between 35- and 44 mpg. At worst Beetle test drives, recorded on Edmunds.com, dipped to 31 mpg.
Fuel economy is one consideration when trying to examine how gasoline spending has changed in five decades and what effect extends to personal budgets.
In an election year, the public may be a bit suspicious of national investigations and politicians' interest in gas prices.
"Personally I think it's a supply and demand issue," DeVries said. "Part of the problem is gas prices were really very low for a long time so a lot of oil producing wells in this country or other places were capped because they were not profitable and unfortunately it means a lot of oil wasn't being pumped."
It has long been noted Americans like to drive. More current trends have put gas-eating sports utility vehicles and larger Suburbans on the road. With fewer mass transit options, out-state Minnesotans are often in their cars commuting to work, school or shopping with few options to save gas although suburban metro residents also face the pressure of the pump.
"Certainly rural Minnesotans feel it more dramatically and farmers and any one who depends on gas for their livelihoods like truckers."
For consumers, DeVries said those added costs are typically passed on to prices. Recently, DeVries said a gas surcharge was added by the company that picks up garbage.
"In the store it will happen in terms of higher prices, not dramatically but it will happen."
DeVries noted the cost of shipping and agriculturally producing food are both affected by high fuel costs. It also means a higher proportion of the family budget for gas will have to increase, meaning fewer spending dollars somewhere else in the budget.
The US Department of Agriculture reported that married couples with children -- and the oldest child between 6 and 17 years of age -- spent about $134 per week for food in 1995.
The financial strain may be all the harder to accept in pocket books when gas was down to 80 cents per gallon a year ago. In 1960, Dispatch archives note a public concern for the end of cheap gas prices. Gas was 24.9 cents per gallon.
The Department of Energy reports leaded regular gas cost 53.2 cents per gallon in 1974. By 1979, the price average taken in a study of retail prices in American cities, rose to 85.7 cents per gallon and jumped to $1.19 in 1980. Unleaded regular sold for $1.24 per gallon that year. In 1982, average prices were $1.31 per gallon for leaded regular and $1.37.8 for unleaded regular.
DeVries said before the 1970s the US was producing more oil and exporting it as well. "It's only as we become more dependent on foreign oil that price fluctuation becomes more dramatic."
Even while Organization of Petroleum Exporting Countries began in 1960, DeVries said OPEC did not have the muscle or power to influence world prices until the early 1970s as industrial countries dependence on imports grew. In the oil business it is hard to make quick supply and demand adjustments when it comes to uncapping wells in West Texas or finding new reserves in Alaska, DeVries said.
"I think we are seeing a kind of deja vu here -- a repeat of the 1970s," DeVries said of the energy crisis that meant long gas lines, high prices and gas shortages. "I think that the economy is probably stronger and not likely to take the dramatic down turn that high energy costs had at that time. That is kind of based on the assumption that gas prices don't go up too much higher. If they do and we see $3 and $4 a gallon, then it may."
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