A Look at Average Gas Prices through the Years

Ok, Boomer! The rallying cry of the younger generations is a cynical side-eye to the opinions of the Baby Boomers. Compared to Millennials and Generation Z, the Boomers may have a very different worldview; of course, the Boomers grew up in a very different time.

Young Boomers watched the first man walk on the moon, received the oral polio vaccines on sugar cubes , witnessed–and participated in–the Civil Rights Movement and the Women’s Rights Movement. To the younger generations, though, the Boomers also seemed to enjoy a time of reasonable prices and economic stability.

Average gas prices change with the economy and may rise and fall because of oil supply and demand ; the U.S. Energy Information Administration explains that the price you pay at the pump “can change rapidly if something disrupts crude oil supplies, refinery operations, or gasoline pipeline deliveries.” When we look back at gas prices at the pump through the years, many of us think that the older generation enjoyed rock bottom prices. But did they really?

Enter…inflation. When we analyze gas prices through the years, we need to factor in inflation to really understand the prices of the past. So what is inflation? To put it simply , inflation is “…an increase in the cost of living as the price of goods and services rise.”

Was gas really cheaper for Boomers? With a little help from the U.S. Inflation Calculator, let’s do the math to make some sense of how the prices of the past would translate into today’s dollars and cents!

A letter to the editor in the Los Angeles Times from a reader corrected a statement by the paper that gas only cost a quarter in the ‘60s. The reader noted that prices back then were typically around 32 cents. Ethyl, the reader noted, cost more at about 36 cents a gallon. However, the site 1960s Flashback lists gas prices for 1964 as 30 cents per gallon.

Now, paying three coins for gas seems incredibly cheap. You need to understand, though, that the average income in 1964 was less than $7,000 . As wages increased, so too did prices though.

To understand what that cheap gas price means in today’s dollars, we need to adjust for inflation. According to the U.S. Inflation Calculator, the price of 30 cents per gallon in the year 1964 would now be $2.50 ! This is still higher than in some places in the U.S. right now!

Most Boomers would have been in their 20s or late teens in the latter half of the ‘70s. So they were definitely at the age to drive and to care about the price they paid for gas.

The U.S. Inflation Calculator reports that in 1978, the average price of gas was around 65 cents. Cheap, right? Today 65 cents might buy you a drink…or a bag of chips. Maybe. Back in 1978, though, 65 cents was more than what it seemed, because income was lower, too. According to a report by the U.S. Department of Commerce Bureau of the Census , “The median money income of households in the United States rose to $15,060 in 1978, an increase of 11 percent over the 1977 median of $13,570.”

The price of gas from 1978 adjusted for inflation would be around $2.58 —not so reasonable!

Everything in the ‘80s was totally over the top; the clothes, the hair, the colors, the make-up. The ‘80s were excessive, extravagant and, ultimately, very prosperous. With the exception of the stock market crash of ’87.

Computers were becoming a bit more mainstream (now they can monitor our home …and drive our cars !). Game systems became the rage, too. Cassettes and CDs replaced vinyl and eight-tracks. Life was good.  So what were we paying at the pump? Was the price of gas as over the top as the ‘80s?

Not always! The U.S. Inflation Calculator reports that gas prices in the mid and late 80s were:

When adjusted for inflation, the price in 1985 would be around $2.86 (give or take a bit). However, later years like 1987 and 1989 had lower gas prices, and, when adjusted for inflation, gas would be around $2.21 —comparable to what we pay today.

Those past prices weren’t necessarily cheaper, and some prices were simply insanely high. We all probably remember when prices were out of control. Back in 2012, average prices soared to $3.60 ! There also were brief periods when prices topped $4 (thank goodness that time has passed!).

In today’s dollars, that high price in 2012 would be more than $4 !

As the years pass, we may look back and think that prices were so much lower. However, we often forget that inflation affects those past figures. To really see those prices in today’s terms, we need to adjust for inflation. And, when we do, we can understand that prices weren’t so different.

Remember, lower prices of the past also often correlated to lower salaries, too. The average salary of the late 1970s would be poverty level today for a couple and well below poverty for a family of four.

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