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?

Answer: 4.4%

Inflation over the Years

Decline of US dollar purchasing power from continued inflation
Decline of US dollar purchasing power from continued inflation

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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