Wordplay

Classical Gas

When I got my driver’s license, the price of gasoline was about 35 cents per gallon, but by the time I got my first car, three years later, the price had skyrocketed to 38 cents. It seemed at the time like highway robbery, so to speak, but we did get full service with that.

An attendant would pump the gas for you, and if you filled the tank he would also clean your windshield and check your oil. At some stations, you would get a free drinking glass to add to your collection of cartoon characters or dinosaurs or presidents or whatever.

These numbers say more about my age than they do about gasoline valuation. After all, you could buy a new luxury car for about $5,000 back then, or a pretty nice house for $20,000. A ticket to the movies was $1.50, which adjusted for inflation was more expensive than it is now.

According to the U.S. Energy Information Administration, the first oil well in the United States was dug in western Pennsylvania by a guy named Edwin Drake, in 1859. He was looking for kerosene to fuel lamps, and had no use for other oil byproducts, including gasoline, so they were just basically dumped out. This practice continued for the following 30 years, most notably by the great monopoly that became Standard Oil.

In 1892, the invention of the internal combustion automobile created a use for gasoline, and demand grew rapidly. By 1920 there were 9 million cars on the road, along with many thousands of stations providing gas, maintenance, and repairs. Gas was 20 cents a gallon, which is comparable to current prices, or at least where they were in 2020.

Gas prices climbed to about 30 cents during the Roaring ’20s, but fell dramatically with the Great Depression of the 1930s. Demand shot back up with the onset of the Second World War, when the government controlled the price at 21 cents and allowed each driver to buy four gallons per week.

Over the years since, the price has bounced around as the economy goes up and down, along with all sorts of other factors. A new refinery or pipeline might increase supply, a war or some move by OPEC might restrict it. Generally, though, a gallon of gas cost somewhere around $2.50 to $3.00 a gallon (in 2015 dollars) most of the time.

Lately it has seemed to move in only one direction. As I write this the average gallon of regular in my area sells for $4.39, up 8 cents this week and $1.11 over the past month. (Thanks, Vlad.)

Why is that important? Well, one reason is that we buy so much of it, around 338 million gallons per day. It affects everybody, even those who don’t drive cars, because it is built into the cost of almost everything we buy. (In the case of retailers, it also affects the price of everything they sell.)

Another reason is that gasoline has, for the past century, been a sort of benchmark measure of inflation that hits millions of consumers at a visceral level. It’s one product that we buy in exactly the same form, every week or two, measured