Gasoline: Painful, and getting worse

Experts say record pump prices are pushing energy spending to early 1980s levels, and that’s helping pull the economy into recession.

NEW YORK (CNNMoney.com) — So gasoline prices are at an all-time high. But after adjusting for inflation, rising incomes and better fuel efficiency, how bad are they really?

The experts’ answer: Bad. Nearly as bad as they’ve ever been, and not likely to get better anytime soon.


Adjusted for inflation, gasoline at $3.227 a gallon is still about 18 cents below its peak of $3.405, set in March 1981, according to the Energy Information Administration. And Americans are spending about 6% of their total disposable income on energy, down from about 8% in 1982.

But prices are higher then they have been at any time in recent memory. In 2002, when many people may have bought a vehicle they are still driving today, Americans spent just 4% of their income on energy. Gas prices, adjusted into 2008 dollars, were at a near all-time low of around $1.30 a gallon.

“It really hasn’t reached a level it did in 1982, but it’s approaching it,” said Kay Smith, an economist at EIA. “It’s becoming a burden.”

CNN