Tuesday, January 10, 2012

2011 Gasoline Prices Hit Record High For Full Year

"With gasoline prices so high I will have to ride my bike everywhere," said a college junior that I coached during her club soccer days.  She is right that gasoline prices are high.  In fact, they averaged a record high for a full year during 2011--$3.51 across America--according to data maintained by Gas Buddy.

The previous highest year was 1981, when gasoline prices averaged $3.45 in inflation adjusted or constant dollar terms, according to EIA data.

The 2011 gasoline prices were about 66 cents per gallon higher than during 2010.  If a family uses 500 gallons per year, the additional cost was $330 and $660 dollars for families using 1,000 gallons per year.  Just the increase in gasoline prices between 2010 and 2011 represents about 1% to 4% of after tax income for families with incomes up to the median income level of approximately $49,000.

Record high gasoline prices is one reason that demand for gasoline was down 5% in December 2011 compared to December 2010.  They are a compelling reason for the nation to be moving forward with policies to accelerate the deployment of lower fuel cost natural gas vehicles and electricity vehicles as well as biofuels.

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