Gas Prices in 1974

The average price rose 39.4% in 1974, from $0.39 to $0.54 a gallon, the largest percentage increase in any year of this record. After inflation the increase was 25.5%, to $3.53 in 2025 dollars.

The increase reflected the nearly fourfold rise in crude oil prices that followed the Arab embargo of October 1973. The embargo was lifted in March 1974, but prices did not return to earlier levels; OPEC members kept the higher prices in place. Federal controls on petroleum prices and a federal allocation system meant that shortages, rather than prices alone, rationed supply in early 1974, and some states used odd-even purchase days.

Congress responded with conservation measures. On January 2, 1974, President Nixon signed the Emergency Highway Energy Conservation Act, which set a national speed limit of 55 miles an hour. In May the Federal Energy Administration replaced the Federal Energy Office. The economy was in recession for all of 1974. Even after the increase, the inflation-adjusted price for 1974 was below the levels reached after the second oil shock, $3.95 to $4.85 in 1979–81.

Measured in the money of the day, 1974 sits near the bottom of the record: its average of $0.54 is the 52nd-highest of the complete years from 1970 through 2025. Restated in 2025 dollars as $3.53, it climbs to 19th-highest. The two rankings diverge this far because the general price level has risen many times over since then, which inflates every 1970s figure far more than the later ones.

In constant dollars, 1974 and 2009 are almost indistinguishable; the 2009 average works out to $3.53. A decade after the embargo, in 1984, the pump price had risen 105.8% to $1.11, more than doubling, while the constant-dollar figure had slipped 2.4%.

The state averages in EIA’s State Energy Data System still sat in a narrow band. Texas had the lowest, $0.50, and Louisiana was a fraction of a cent behind at $0.50. Hawaii ($0.60) and Alaska ($0.60) had the highest, less than a cent apart. New York, which by 1984 would be among the ten cheapest states, ranked 49th from the cheapest of 51 in 1974. Texas held the bottom place in five of the ten years of the 1970s, more often than any other state.