People constantly talk about the change in gas prices, and it’s no wonder. This topic is covered in the news, and drivers see the price of gas listed on giant signs everywhere they go.
While the visibility of gas prices makes it easy to see how the economy is doing, it doesn’t reveal the real-world impact this has on peoples’ lives. That’s why our experts compiled a list of the highest gas prices in US history, starting from the 1970s and going to 2022’s record-high prices.
GAS PRICES IN 1974 REACHED $0.65
In 1967, tensions rose at the border between Israel and Arab states, leading to the Six-Day War. While this war only lasted six days, Israel seized territories from Egypt, Jordan, and Syria.
Arab states, determined to regain these territories, started the Yom Kippur War in October 1973. President Nixon requested Congress send $2.2 billion in emergency military aid to Israel in an attempt to end the Yom Kippur War. He said this money would go toward maintaining military balance and stability in the Middle East.
In response, the Organization of Arab Petroleum Exporting Countries (OAPEC) put an oil embargo on the United States into effect. This banned crude oil from being exported to the United States and introduced cuts in oil production, leading to an increase in the price of oil.
During an address to the nation on TV and radio, President Nixon revealed Project Independence and said this would lead to greater self-sufficiency for America. A couple of years later, Congress passed the Energy Policy and Conservation Act in 1975. This created the first fuel-efficiency standards for vehicles and the Strategic Petroleum Reserve, the world’s largest supply of emergency crude oil.
By 1974, the price reached an average of $0.65 per gallon when adjusted for inflation in 2022.
GAS PRICES IN 1979 REACHED $0.90
The Iranian Revolution began in late 1978 and ended in early 1979, and during that time, oil workers went on strike. As Iran is a major petroleum exporting country, this caused a significant decline in the global supply of crude oil. This resulted in a loss of 4.8 million barrels each day, or 7% of the world’s production.
Buyers of crude oil were concerned the crisis would spread to other countries in the region. As a result, buyers covered their current demand and increased their inventories, further affecting the shortage and driving up prices.
In the US, several states responded by rationing gasoline. Consumers were only allowed to purchase gas every other day, depending on the last number on their license plate. Drivers with a license plate ending in an even number, including zero, could buy gas on even-numbered days. In the same way, drivers with license plates ending with an odd number could buy gas on odd-numbed days.
By 1979, the price reached an average of $0.90 per gallon.
GAS PRICES IN 1980 REACHED $1.25
With the revolution over, the production seemed to recover. Then, Iran, a country weakened by war, was invaded by Iraq in September 1980. The Iran-Iraq War virtually ceased oil shipments from these two countries.
The US resorted to importing about 20% less crude oil that year, which helped the nation moderate the impact of higher foreign crude oil costs. At the same time, American refineries operated at 76%, down 9% from the previous year.
Still, with the price controls Nixon initiated in 1971 continuing to phase out, people were encouraged to increase oil exploration and domestic oil production. As a result, there was a higher domestic output of crude oil than the year before, even with weakened demand for petroleum.
By 1980, the price reached an average of $1.25 per gallon.
GAS PRICES IN 2005 REACHED $2.30
Gas prices increased in 2005 as well, but this was due to natural disasters instead of foreign unrest. Hurricane Katrina occurred in August 2005, affecting 25% of US crude oil production.
Two major gasoline pipelines shut down for a few days, leading to shortages on the East Coast. In the area, some gas stations ran out of gas. Other parts of the country, especially Northern states, were not as affected by rising gas prices because their refineries had easier access to Canadian oil.
Hurricane Katrina brought gas prices up to $3.20 per gallon. September’s Hurricane Rita also caused supply disruptions and brought gas prices up to $2.93.
By 2005, the price reached an average of $2.30 per gallon.
GAS PRICES IN 2008 REACHED $3.27
When the US entered a recession in late 2007, the nation’s development of natural gas production and the prices of natural gas and crude oil rose substantially. They’re both fossil fuels and made up of hydrocarbons, but crude oil stays in a liquid state and natural gas exists in a gaseous state.
Natural gas is also one of the cleanest burning alternative fuels. It’s cooled to -260° Fahrenheit to become a liquid and create liquified natural gas (LNG) for cars and trucks.
By 2008, the price reached an average of $3.27 per gallon.
GAS PRICES IN 2012 REACHED $3.64
In 2012, crude oil prices rose due to foreign unrest again. Iran violated the International Atomic Energy Agency (IAEA) transparency requirements by refusing to disclose its nuclear activities. Iranian officials even denied IAEA inspector requests to enter the Parchin military base and search for evidence of nuclear development.
There were also production disruptions in countries such as Syria, Sudan, and Yemen. In total, this took about 1 million barrels of oil a day off the market. The US increased its oil production up to 6 million barrels a day and increased its inventories of crude oil.
By 2012, the price reached an average of $3.64 per gallon.
GAS PRICES IN 2022 REACHED $5
Gas prices reached a historic $5.01 per gallon for regular unleaded on June 14, 2022, and $5.81 for diesel on June 19, 2022. Russia invaded Ukraine in February, and weeks later, President Biden announced the US ban on imports of Russian oil, liquified natural gas (LNG), and coal.
Before the crisis arose, another factor impacted gas prices. Demand increased with the economic recovery of the pandemic, and supply had not kept pace.
Plus, if consumers spend more money at the pump, this leaves them with less money to spend on other goods and services, creating a ripple effect on the economy. This can lead to buying less of something or waiting to make a big purchase. Also, if consumers decide to drive less, this will negatively impact the retail marketplace, causing fewer job openings.
RELY ON HOME SERVICE OIL
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