Gas Prices in 1983

The average price fell 12.2% in 1983, to $1.14 a gallon, and 14.9% after inflation, to $3.69 in 2025 dollars. At the pump it was the 2nd-largest annual decline of the decade, after 1986.

The drop came despite a tax increase. The Surface Transportation Assistance Act of 1982, signed on January 6, 1983, raised the federal gasoline tax from 4¢ to 9¢ a gallon effective April 1, 1983, the first change in the federal rate since 1959. Of the new rate, 8¢ went to highways and 1¢ to a new mass transit account.

Crude oil moved the other way. On March 14, 1983, OPEC agreed to cut its official benchmark price from $34 to $29 a barrel, the first reduction in the organization’s history, and set new production quotas. The cut reflected lower world demand after the recessions of 1980–82 and growing supply from producers outside OPEC. The fall in crude outweighed the 5¢ tax increase in the annual average, which fell 15.9¢.

The 1983 pump price of $1.14 was nearly the same as the 1993 figure of $1.10; the later year was only 3.2% lower. In 2025 dollars the gap is far wider, 33.3%, because a decade of inflation sat between them. Another decade on, 2003 had climbed 36.9% above the 1983 pump price, yet its real price was still 25.9% lower.

Looking back instead of forward, 1983 cost 194.2% more at the pump than 1973 and 31.2% more after inflation. Its constant-dollar figure of $3.69 ranks 16th-highest in the record and is close to 2023 ($3.72); the nominal figure ranks 34th-highest.

Texas and Missouri shared the lowest state average, $1.09. For Texas that made eight of the eleven years from 1973 in which it had, or shared, the cheapest gasoline of the 51. Hawaii, at $1.47, was 32.5¢ above the U.S. figure, a wider margin than in any earlier year of the SEDS series. Alaska was second most expensive, and Vermont and the District of Columbia made up the rest of the top four.

The 1982 U.S. annual average was $1.30, so the move to $1.14 in 1983 was a fall of 12.2% at the pump. The 1984 average was $1.11, and that was a further fall of 2.5% at the pump. In constant 2025 dollars the 1983 figure fell 14.9% from 1982, and the 1984 figure fell 6.6% from 1983.

The 1973 average at the pump was $0.39. Set against the constant-dollar peak of $5.08 in 2012, the 1983 figure of $3.69 sits well inside the range of the 56 complete years from 1970 to 2025.

State prices in 1983 spread across 37.3¢ between the cheapest and the most expensive. Missouri and Texas were cheapest at $1.09, while Hawaii was highest at $1.47. Of the 51 states, counting the District of Columbia, 31 of 51 had an average above the U.S. figure, so a majority of places paid more than the national average of $1.14.

The national figure for years before 2000 is the EIA State Energy Data System average for all grades of motor gasoline, taxes included, and it is approximate. The site holds no weekly data for 1983, so the annual average is the only national measure available for the year.