For a few moments Monday, it appeared that gasoline prices had reached an unwelcome new status: the highest ever, adjusted for inflation.
But breathe easy, consumers. Fresh data show that the nationwide average price is still 7 cents a gallon away from beating the inflation-adjusted record set in March 1981 shortly after the start of the Iran-Iraq war.
If you remember back that far, your actual pump price was $1.42 a gallon for regular unleaded. But in today’s dollars, that gas was worth $3.29.
Energy analysts and media outlets have been keeping a close eye on the inflation- adjusted number because, frankly, mere record highs, unadjusted for inflation, are old news. Colorado and the U.S. have been setting records every day for the past week or two.
So in its quest for news, the media machine started humming late Sunday when the Lundberg Survey reported that the national average price of $3.18 had topped the inflation-adjusted high of $3.15 in March 1981.
That report raised eyebrows, not only for its apparently sensational new record but because Lundberg’s use of $3.15 for the adjusted 1981 price was several cents lower than the $3.22 adjusted price used by the authoritative U.S. Energy Information Administration.
The difference? Economists are unsure. Inflation- adjusted prices can be determined using different indexes. The EIA uses the Consumer Price Index. The Lundberg Survey did not return a call seeking an explanation of its methodology.
But the drama didn’t end there.
The EIA on Monday released its own weekly price survey showing a nationwide average price of $3.218 for regular. That was a fraction of a cent lower than the inflation- adjusted record high of $3.22.
Or was it?
Upon closer review, EIA analysts determined that they hadn’t calculated the inflation adjustment since last year. In the meantime, inflation had continued creeping ahead.
So they dusted off their calculators, and using May 2007 dollars, they determined that the March 1981 gas price actually was $3.29 in today’s value.
“We’re close to an inflation-adjusted high, but we’re not quite there yet,” said Doug MacIntyre, senior oil-market analyst at the EIA.
“But to me,” he said, “the bottom line is that gas prices are very high whether you look at it in today’s dollars or 1981 dollars.”
Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.
