Supply, demand, and consumer gasoline prices
October 08, 2003
According to the BLS Consumer Expenditure Survey, the average consumer spent approximately $1,300 on gasoline and motor oil in 2000, an increase of 22.4 percent over the 1999 figure.
Over the same period, the average price of gasoline increased 36.3 percent, indicating that price changes within the gasoline market can substantially affect consumers’ spending.
Conventional reasoning suggests that the high level of volatility for gasoline prices is the result of supply forces, as the price of crude petroleum changes rapidly due to production decisions of the Organization of Petroleum Exporting Countries (OPEC) nations. However, shifts in demand also can cause variations in gasoline prices.
Historically, price changes for consumer gasoline have been driven by changes in supply as opposed to demand. In all recent cases, interruptions in the supply of crude petroleum resulted in significant increases in the prices of crude petroleum, wholesale gasoline, and consumer gasoline. However, changes in demand affected gasoline prices only marginally.
The data in the chart are from the Consumer Expenditure Survey program; these and other data are analyzed in "Consumer gasoline prices: an empirical investigation," Monthly Labor Review, July 2003.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Supply, demand, and consumer gasoline prices on the Internet at http://www.bls.gov/opub/ted/2003/oct/wk1/art03.htm (visited May 03, 2016).
Recent editions of Spotlight on Statistics
Employment and Wages in Healthcare Occupations
Healthcare occupations are a significant percentage of U.S. employment. Some of the largest and highest paying occupations are in healthcare. This Spotlight examines employment and wages for healthcare occupations.
Fifty years of looking at changes in peoples lives
Longitudinal surveys help us understand long-term changes, such as how events that happened when a person was in high school affect labor market success as an adult.
- A look at pay at the top, the bottom, and in between
The Spotlight examines how earnings and wages have changed over time and how they differ within a geographic area, industry, or occupation.