Gasoline Prices Adjusted for Inflation

Gas prices are often very volatile with sharp swings in what Americans pay at the pump. The average price for a gallon of gasoline was $4.369 in April 2022, marking a decrease of 0.7% from $4.401 in March and an increase of 24.7% from the end of last year when a gallon in December was $3.505.

In the 2021 calendar year, the average price of gas advanced to $3.133 per gallon from the 2020 average of $2.242, representing a 39.7% increase.

Pricing for gasoline is a major category used by U.S. Labor Department’s Bureau of Labor Statistics (BLS) in calculating inflation but their volatility is also why they are excluded when the agency calculates core inflation rates.

The chart above and table below shows average annual prices of gasoline and those prices based on inflation in 2021 dollars. Specifically, they offer insights into how prices at the pump have changed over the years and how those prices compare after they have been adjusted for inflation.

Inflation Adjusted Gasoline Prices (1978-2021)
Category: Gasoline (All types, Per gallon)

Year Average Gasoline Prices by Year* Average Annual CPI for Gasoline** Gas Prices Adjusted for Inflation (In 2021 Dollars)
1978 0.652 51.900 3.315
1979 0.882 70.200 3.316
1980 1.221 97.500 3.307
1981 1.353 108.500 3.292
1982 1.281 102.800 3.289
1983 1.225 99.400 3.253
1984 1.198 97.800 3.233
1985 1.196 98.600 3.202
1986 0.931 77.000 3.192
1987 0.957 80.100 3.155
1988 0.964 80.800 3.149
1989 1.060 88.500 3.162
1990 1.217 101.000 3.182
1991 1.196 99.200 3.184
1992 1.190 99.000 3.173
1993 1.173 97.700 3.169
1994 1.174 98.200 3.156
1995 1.205 99.800 3.189
1996 1.288 105.900 3.211
1997 1.291 105.800 3.222
1998 1.115 91.600 3.215
1999 1.221 100.100 3.220
2000 1.563 128.600 3.208
2001 1.531 124.000 3.260
2002 1.441 116.000 3.279
2003 1.638 135.100 3.201
2004 1.923 159.700 3.179
2005 2.338 194.700 3.170
2006 2.635 219.900 3.163
2007 2.849 237.959 3.161
2008 3.317 277.457 3.157
2009 2.401 201.555 3.145
2010 2.836 238.594 3.138
2011 3.577 301.694 3.130
2012 3.695 311.470 3.132
2013 3.584 302.577 3.127
2014 3.425 290.889 3.109
2015 2.510 212.007 3.126
2016 2.204 187.602 3.101
2017 2.469 211.770 3.078
2018 2.794 240.599 3.066
2019 2.698 232.003 3.070
2020 2.242 194.130 3.049
2021 3.133 264.017 3.133

*Data Source: U.S. Bureau of Labor Statistics: 12-Month Average Gasoline, all types, per gallon/3.785 liters in U.S. city average, average price, not seasonally adjusted. CPI Average Price Data.

**Data Source: U.S. Bureau of Labor Statistics: 12-Month Average Gasoline (all types) in U.S. city average, all urban consumers, not seasonally adjusted. CPI-All Urban Consumers.

***According to the U.S. Bureau of Labor Statistics, the gasoline (all types) index is composed of three grades of gasoline:

  • Regular unleaded gasoline: Gasoline having an octane rating greater than or equal to 85 and less than 88.
  • Midgrade unleaded gasoline: Gasoline having an octane rating greater than or equal to 88 and less than or equal to 90.
  • Premium unleaded gasoline: Gasoline having an octane rating greater than 90.

How to Adjust Gasoline Prices for Inflation

In calculating gasoline prices to adjust for inflation, we’ll use an example that shows how to adjust them from 1978 to 2021. First, consider these facts which are shown in the table above:

  • The average price for gasoline in 1978 was $0.652 per gallon.
  • The annual average CPI for Gasoline (all types) in 1978 was 51.900.
  • The annual average CPI for Gasoline (all types) in 2021 was 264.017.

The following formula shows how to adjust gasoline for inflation:

1978 Gas Price x (2021 CPI for Gas / 1978 CPI for Gas) = Adjusted Gas Price in 2021 Dollars

Using the actual numbers:

$0.652 x (264.017/51.900) = $3.32