Automotive fuel prices and availability
A study was made to establish the range of possible future automobile fuel prices based on a broad assessment of the supply and demand for energy in the United States. Under nominal case assumptions, the 1985 cost of regular gasoline to the consumer is 65 cents/gallon in 1975 currency. With respect to this breakdown, it should be noted that the cost of crude oil corresponds to a crude oil price of about $14.25 per barrel in 1975 currency. However, process losses, density changes, and the allocation of joint costs in refining make it difficult to translate crude oil prices into gasoline prices. It is also useful to note that at an average annual inflation rate of 5 percent, the 1985 gasoline pump price is $1.06/gallon in 1985 currency. Projections are shown of gasoline prices for the set of sensitivity cases developed. Each sensitivity case assumes that gasoline taxes and distribution costs are constant in 1975 currency. In other words, these costs are assumed to escalate with overall inflation. Refining construction costs are assumed to vary with the mix of product demands and the number of new refineries required, but the model of refining costs employed here is only a simple approximation. The projections are striking because they show that for a given case there is little escalation over time and there are relatively small differences in crude oil costs. As assumptions about demand growth or the availability and cost of energy resources are changed among the various cases, substitutions among imported, domestic, and synthetic crude sources occur, or crude oil products are partially replaced by gas, electricity or coal. Thus the effects of large changes in demand or resource availability and cost are moderated by the ability of the energy market to slowly change the way in which energy is used.
- Research Organization:
- Stanford Research Inst., Menlo Park, CA (USA)
- DOE Contract Number:
- PO-BE-76-P1795
- OSTI ID:
- 7125285
- Report Number(s):
- TID-27218
- Country of Publication:
- United States
- Language:
- English
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