Gas Prices in 1998

The average price fell 13.9% in 1998, to $1.05 a gallon. After inflation it fell 15.2%, to $2.07 in 2025 dollars, the lowest inflation-adjusted annual average of any year from 1970 through 2025 in this record.

The cause was a collapse in crude oil prices. OPEC’s decision in Jakarta in November 1997 to raise production by about 10 percent took effect in January, while the Asian financial crisis reduced oil demand in the region that had driven much of its growth. Crude oil prices fell through the year; the Oxford Institute for Energy Studies described the episode as the oil price crisis of 1998.

OPEC reversed course during the year, agreeing on March 31 to cut production by about 1.2 million barrels a day and on June 24 to cut a further 1.4 million, but the reductions were not enough to lift prices before the end of the year. The 1998 price was 57.2% below the 1981 level in 2025 dollars.

State averages in 1998 ran from $0.86 in Georgia to $1.49 in Hawaii, a wider range than in any other year from 1970 through 1999. Georgia’s figure, equal to $1.70 in 2025 dollars, is the lowest inflation-adjusted state average anywhere in the SEDS series. Hawaii was 43.7¢ above the national average and well ahead of Alaska, the next-highest at $1.26. Connecticut and the District of Columbia were third and fourth. At the low end, South Carolina ($0.93) and Oklahoma ($0.94) followed Georgia, and eleven states in all averaged under a dollar a gallon for all grades, the most since 1989.

Nationally, the 1998 average of $1.05 ranks 42nd-highest at the pump. The recovery that followed was steep: within ten years the real price had more than doubled, with 2008 134.3% higher in 2025 dollars and 209.3% higher in current dollars. Even 2018 stood 68.2% above 1998 after inflation and 159.1% above it at the pump. Looking back twenty years, the real price had fallen 35.9% since 1978, while the pump price had risen 60.1%.

The national average in 1997 was $1.22 a gallon, and in 1999 it came to $1.15. The move from 1998 to 1999 was a rise of 10.0% at the pump, while in constant 2025 dollars the same move was a rise of 7.6%. Both 1999 changes are measured from the 1998 average of $1.05.

Looking back a decade, the 1988 pump price was $0.92. From 1988 to 1998 the inflation-adjusted average fell 17.0%, so the 1998 pump price of $1.05 sits beside a lower real price than in 1988.

The highest U.S. annual average in constant 2025 dollars was $5.08, recorded in 2012. On that same inflation-adjusted basis, 1998 holds the 56th-highest position among the 56 complete years on record, which run from 1970 to 2025.

Among the 51 jurisdictions counting D.C., 31 of 51 had a 1998 average above the U.S. average. Hawaii at $1.49 and Georgia at $0.86 were 62.8¢ apart in 1998. These state figures are EIA State Energy Data System annual averages for all grades.

The 1998 national figure of $1.05 is approximate, because before 2000 it is the EIA State Energy Data System average for all grades of motor gasoline with taxes included. The site holds no weekly data for 1998, so every 1998 figure here is an annual one.