Balancing Act

Yesterday on Autoblog.com there was a post indicating that gas really is not expensive. You can imagine how happy I was to find out that gas is reasonably priced.

The only problem I have is that it sure feels like it is expensive when I pump $50.00 or more into my Hyundai.

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Well the good folks at Inflationdata.com and Autoblog.com explain that the expense is relative to inflation. Given that gas averaged a quarter a gallon back in 1918, which would be about $3.50 in today’s dollars, they figure that the current national average of $3.28 makes gas appear relatively cheap.

See the full chart here

The key word in this theory is “Relatively.”

So the question is one of perspective. Is this simply the justification that oil comapanies use to manipulate prices at the pump, or is there some validity to the idea that fuel is inexpensive from a historical perspective?

There are others who would argue that gas was considered a luxury back in the day where now we are dependent on petrol and therefore the price of petrol should be lower today.

Another valid argument is that the comparison is not relevant. That the price has gone up so sharply in the last four years is the greater issue. According to CNN, in May of 2003, the national average for a gallon of go juice was $1.73. So while gas may be cheap in the big scheme of things that offers very little comfort 190% later.

I suppose like many things in life this is a glass half empty or half full type of subject. For me, I just wish the price would settle for a while and allow people to ease into the new reality of $3.00 - $4.00 gas prices.

What do you think?