Saturday, November 29, 2008

Could gasoline now be too low?

I'm worried that with gasoline dropping this low, we'll lose our interest in Drilling for More Domestic Oil. Come on nation, keep your focus, we need energy independence. Drill Here, Drill Now. Do you remember the Don't Go Movement in the summer, or have you already forgotten too? Our nation needs to get energy independent, now.

The chart above shows the cost of 1,000 gallons of gas purchased at the retail price from January 1980 to November 2008, measured as a percent of monthly per-capita disposable income using income data and population data from the BEA, and gas price data from the EIA and Gas Buddy.

At the current national average price of $1.83 per gallon, 1,000 gallons of gas ($1,830) would cost 5.22% of per-capita disposable income of $35,058. That's the lowest cost since December of 2003, almost five years ago. In St. Louis, where gas is available in some locations for as low as $1.33 per gallon, a thousand gallons of gas now costs only 3.79% of monthly per-capita disposable income, which is slightly lower than the February 1999 all-time historical low of 3.88%, when gas averaged 92 cents per gallon.

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