Wednesday, February 21, 2024

## Gas Price Inflation

### Update Apr 13, 2023. Nine years after this post, the price of gasoline averages \$3.62. In 2013 the actual gas price was 3.53. It has risen at a rate of 0.3% yearly. Surprisingly low.

Got a chance to use Python for something I used to calculate in MathCad or Basic.

In a replay of a Twilight Zone episode (1960), “The Hitchhiker” a sign shows gas cost 32.9 cents/gal.  Now, in 2014, it’s 10 times higher.

As a baby boomer, I’m used to cautions about considering the inflation rate in retirement planning, but there the idea is abstract.

What is the average rate of gas inflation over a period of 54 years to produce a ten-fold increase in price?

## Inflation over the Years

If all prices suffered from the same inflation as gasoline did, a dollar now would buy about 12% of what a dollar from 1960 did.

FYI. Dividing 72 by 4.4 yields 16 1/3 years, the # of years gas takes to double, if it increased smoothly at an average rate of 4.4%/year

Python code
import math
S = 32.9  # gas cost 32.9 cents in 1960 Twilight Zone ‘The Hitchhiker’
E = 329.0  # gas costs about \$3.29 in 2014. Rounded down to make it 10 times earlier price
n = 54
above = math.log(E/S)/(n-1)
r = math.exp(above) -1
print(‘The average rate of gasoline inflation is’, ‘{0:3f}’.format(r))

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