Gasoline Prices

November 1, 1972

Report Outline
Factors in Tise of Gasoline Prices
Economics of the Petroleum Industry
Alternatives to Gasoline Consumption
Special Focus

Factors in Tise of Gasoline Prices

Effect of Current Gasoline Shortage on Fuel Costs

Motorists might dispute IT, but gasoline, a business which involves six of the country's largest corporations, 220,000 retail outlets, 3.7 cents of every consumer dollar and more than one-fifth of all the energy used in the nation, has been a relatively good buy. According to Platt's Oilgram, a McGraw-Hill daily oil price-reporting service, the average cost of regular-grade gasoline in the 55 key U.S. markets surveyed was 37.29 cents a gallon—25.43 cents for the gasoline and 11.86 cents for federal and state taxes—in October. The average pump price in 1961 was 30.76 cents a gallon. In just over 10 years, the cost of gasoline went up 21.1 per cent. In contrast, the Consumer Price Index recorded a 40.8 per cent rise in the over-all cost of living during that time.

But gasoline may not be a good buy much longer. From industry officials, trade journals and congressional committees have come dire warnings of higher prices and shortages in the months and years ahead. Some authorities predict that gasoline prices may increase by 50 per cent or more in the next few years—making driving a luxury that not all Americans can afford. The reasons for these bleak forecasts include increased consumption, growing dependence on foreign petroleum, and overburdened refining capacity at home. Refineries transform almost half of every barrelof crude oil into gasoline.

After holding hearings Sept. 27–28 on “Inadequacy of Petroleum Supplies,” a House Small Business subcommittee reported that domestic producers of crude oil currently provide some 12 million barrels a day whereas demand is running at 16 million barrels. Neither domestic producers nor refiners are able to meet this demand and import restrictions have not been loosened enough to avert shortages, the subcommittee reported.Rep. Neal Smith (D Iowa), the subcommittee chairman, spoke of “numerous reports of supply shortages” already and said these should alert the various agencies of government “to the possibility of critical shortages occurring in the near future.” It was subsequently learned that the Price Commission had begun in the summer of 1972 to investigate gasoline price rises.

ISSUE TRACKER for Related Reports
Oil and Gasoline Prices
Jun. 22, 2012  U.S. Oil Dependence
Nov. 01, 2011  Future of the Gulf States
Jan. 04, 2008  Oil Jitters Updated
Jul. 2007  Energy Nationalism
Sep. 30, 2005  Domestic Energy Development
Jan. 24, 2003  Oil Diplomacy
Aug. 07, 1998  Oil Production in the 21st Century
Aug. 23, 1991  Oil Imports
Oct. 30, 1987  Persian Gulf Oil
Apr. 04, 1986  Oil Prices
Dec. 23, 1983  Quest for Energy Independence
Sep. 23, 1983  OPEC: 10 Years After the Arab Oil Boycott
May 29, 1981  Western Oil Boom
Aug. 25, 1978  Oil Imports
Feb. 10, 1978  Oil Antitrust Action
Dec. 17, 1976  Alaskan Development
May 17, 1974  Arab Oil Money
Mar. 15, 1974  Oil Taxation
Jul. 18, 1973  Offshore Oil Search
Mar. 28, 1973  Persian Gulf Oil
Nov. 01, 1972  Gasoline Prices
Oct. 14, 1970  Fuel Shortages
Nov. 12, 1969  Alaskan Oil Boom
Dec. 11, 1968  Oil Shale Development
Oct. 26, 1960  World Oil Glut
Sep. 10, 1958  Middle East Oil
Oct. 30, 1951  Oil Nationalization
Aug. 11, 1950  Oil Imports
Apr. 23, 1947  Oil of the Middle East
Jan. 22, 1946  Offshore Oil
Mar. 09, 1944  Oil Supply
Dec. 24, 1935  Oil in World Politics
May 07, 1931  Control of Production in the Oil Industry
Mar. 27, 1929  The Oil Leasing Policy of the New Administration
Jun. 08, 1927  Oil Conservation and Stabilization
Feb. 08, 1926  The Mexican Land and Petroleum Laws
Apr. 18, 1925  The Price of Gasoline
Feb. 11, 1924  Background of the Oil Lease Cases
Sep. 01, 1923  Gasoline
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Oil and Natural Gas