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 climbed to $2.907 in April from $2.856 in March, marking an increase of 1.8%. Over the most recent 2020 calendar year, the average price of gas dropped to $2.242 from $2.698, marking a 16.9% decline from 2019.

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 2020 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 (1978-2020)
Category: Gasoline (All types, Per gallon)

Year	Average Gasoline Prices by Year*	Average Annual CPI for Gasoline**	Gas Prices Adjusted for Inflation (In 2020 Dollars)
1978	0.652	51.900	2.438
1979	0.882	70.200	2.438
1980	1.221	97.500	2.432
1981	1.353	108.500	2.421
1982	1.281	102.800	2.419
1983	1.225	99.400	2.392
1984	1.198	97.800	2.377
1985	1.196	98.600	2.354
1986	0.931	77.000	2.347
1987	0.957	80.100	2.320
1988	0.964	80.800	2.315
1989	1.060	88.500	2.325
1990	1.217	101.000	2.340
1991	1.196	99.200	2.341
1992	1.190	99.000	2.333
1993	1.173	97.700	2.330
1994	1.174	98.200	2.321
1995	1.205	99.800	2.345
1996	1.288	105.900	2.361
1997	1.291	105.800	2.369
1998	1.115	91.600	2.364
1999	1.221	100.100	2.368
2000	1.563	128.600	2.359
2001	1.531	124.000	2.397
2002	1.441	116.000	2.411
2003	1.638	135.100	2.353
2004	1.923	159.700	2.337
2005	2.338	194.700	2.331
2006	2.635	219.900	2.326
2007	2.849	237.959	2.325
2008	3.317	277.457	2.321
2009	2.401	201.555	2.312
2010	2.836	238.594	2.307
2011	3.577	301.694	2.301
2012	3.695	311.470	2.303
2013	3.584	302.577	2.299
2014	3.425	290.889	2.286
2015	2.510	212.007	2.298
2016	2.204	187.602	2.280
2017	2.469	211.770	2.263
2018	2.794	240.599	2.254
2019	2.698	232.003	2.258
2020	2.242	194.130	2.242

*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.

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 2020. 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 2020 was 194.130.

The following formula shows how to adjust gasoline for inflation:

1978 Gas Price x (2020 CPI for Gas / 1978 CPI for Gas) = Adjusted Gas Price in 2020 Dollars

Using the actual numbers:

$0.652 x (194.130/51.900) = $2.44

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