As the summer driving season revs up, U.S. motorists will be grudgingly paying record gasoline prices this Memorial Day--but a leading oil expert suggests it's time we stop our whining.
Daniel Yergin, one of the most prominent of petroleum industry consultants, told Congress on Wednesday that despite the pain caused by short-term volatility, the long-term trend in inflation-adjusted gasoline prices is decidedly downward.
You say you remember paying 30 cents a gallon in the 1960s? That's $1.75 in current dollars, Yergin said. Gas for $1.25 in 1980 equals more than $2.50 in today's dollars.
This slow erosion in real gasoline prices, due largely to more efficient refining and marketing by oil companies, has helped change what and how Americans drive in fundamental ways, Yergin testified before the House Commerce subcommittee on energy and power.
"Since 1991, gasoline prices [adjusted for inflation] have continued to come down, and even at the high prices of this spring are considerably lower than they were in the 1950s and 1960s in most areas of the United States," said Yergin, drawing on a new report issued by the Massachusetts-based consulting firm he heads, Cambridge Energy Research Associates.
U.S. drivers are paying an average of $1.526 a gallon for self-serve regular gasoline, the highest price on record for Memorial Day, the Energy Information Administration reported Monday in its weekly survey of 800 gasoline stations. The average price of self-serve regular gasoline in California is $1.613, according to the EIA, an independent statistical and analytical agency within the U.S. Energy Department.
The U.S. pump price is up 40 cents a gallon from a year ago, and the California price up about 27 cents. Gasoline prices have been rising because of higher oil prices and low gasoline inventories.
Crude oil for July delivery rose $1.15 to $29.93 a barrel Wednesday on the New York Mercantile Exchange. Traders said a surprising drop in U.S. inventories indicated stronger demand from refiners making gasoline for the summer. Oil futures, which reached a nine-year high of $34.37 on March 8, are 75% higher than a year ago.
Oil and gasoline prices will continue to be volatile, driven by political events, supply, demand, technical problems, inventories and environmental regulations, said Yergin, 1991 Pulitzer Prize-winning author of "The Prize," a history of the oil industry.
