Gas prices, record high or not, hit wallet hard
Adjusted for inflation, costs per gallon have been more expensive, but no let-up's in sight
By DAN HIGGINS, Business writer
First published: Thursday, October 7, 2004
Don't worry, gasoline isn't so expensive.
The next time you spend $30 or more filling up the tank, just tell yourself, "At least we're still 86 cents off the inflation-adjusted highs of the early '80s."
It's not the kind of comforting slogan that fits on a card in your wallet, but it's true. When adjusted for inflation, gas prices reached their all-time high in 1981, when a gallon cost the present-day equivalent of $2.86.
On Wednesday, the average price of a gallon of unleaded hit $2 again in the Albany-Schenectady-Troy market, the second time this year.
Mark Miller, who owns Miller's Landscaping in Schenectady, said regardless of what the inflation-adjusted data may be, he's still spending a lot more today on gasoline than he was 23 years ago.
"I wouldn't have noticed then because I had just a couple trucks," he said. Now the landscape maintenance and snow-plowing business has nine trucks, and Miller estimates he is spending $12,000 to $15,000 a year on gasoline alone. That doesn't even include what he puts inside his company's lawn mowers.
"People cry about it, but it's gas. You're going to buy it so I try not to worry about it," Miller said Wednesday. He has begun raising prices on bids for some jobs, however, to account for the increase.
Around the Capital Region, the average price of gas was just a hair over $2 Wednesday, according to AAA. On Albanygasprices.com, a Web site on which consumers post the highest and lowest gas prices they find, prices ranged from $2.07 at a Mobile station in Albany and a Sunoco station in Rensselaer to $1.93 at a Hess station in Slingerlands.
After 1981, the second-highest average national gas price was in 1920, when the price at the pump was 29.8 cents a gallon. When adjusted for inflation, that is the 2004 equivalent of $2.81 a gallon, according to the Energy Information Administration, the statistical arm of the U.S. Department of Energy.
Gas prices nationally decreased in July and August, even as the price for a barrel of crude oil kept going up, topping $40 for the first time in August.
But crude futures broke more records Wednesday, closing above $52 a barrel. That news came after the Energy Department reported that U.S. oil stockpiles increased less than expected, according to Bloomberg News.
"They say supplies are tight, but I haven't had a dealer run out of gas since 1979," said Ralph Bombardiere, executive director of the New York State Association of Service Stations and Repair Shops, a trade group in Albany.
He said members suffer along with consumers when gas prices go higher, because they squeeze their profit margins in order to keep prices down.
Bombardiere said he thinks consumers already have made the psychological adjustment to paying $2 or more for a gallon of gas. The next barrier, he said, is $3. But that isn't likely to happen right away.
In the short term, Bombardiere predicts prices around the state will increase dramatically over the next few weeks, in response to higher wholesale and crude prices.
Dan Higgins can be reached at 454-5523, or by e-mail at
dhiggins@timesunion.com.