Gas Prices in 2003

Gasoline averaged $1.56 in 2003, 21.6¢ more than in 2002 and 13.5% higher after inflation. Prices climbed in the first quarter as crude oil rose ahead of the U.S.-led invasion of Iraq in March; the monthly average reached $1.69 in March, then eased through spring and early summer once the invasion began.

The year’s high came in late summer. In the week of August 25 the national average rose 12¢ to $1.75, at the time the largest one-week increase the EIA had recorded and a record in unadjusted dollars. An EIA inquiry into the spike pointed to a rupture on July 30 of Kinder Morgan’s pipeline between Tucson and Phoenix, which cut Phoenix’s gasoline supply by about 30 percent in mid-August, and to refinery production lost during the August 14 blackout in the Midwest and Northeast. Prices fell back in the fall. The year’s low, $1.44, was its first week, January 6, and it ended at $1.48.

Set beside 2000, the first year of the weekly series, 2003 looks different depending on the measure. In current dollars the average rose 5.2%, from $1.48 to $1.56. After adjusting for inflation it fell 1.6%, so a gallon in 2003 cost slightly less in real terms than one three years earlier. The long-run rankings reflect the same split: 23rd of the complete years since 1970 by the price at the pump, 40th once inflation is removed. A decade later the picture had changed completely, with the 2013 average of $3.51 more than double 2003’s, up 124.5% in current dollars and 77.4% after inflation.

For all the attention the August spike drew, 2003 had the narrowest range in dollars of any complete year in the weekly series: from its lowest week, $1.44 on January 6, 2003, to its highest, $1.75 on August 25, 2003.

The state figures EIA publishes for 2003 cover all grades of gasoline. Hawaii had the highest of them, $1.88, which was 35.3¢ above the U.S. all-grades average; Alaska followed at $1.74. Georgia’s $1.34 was the lowest, with Oklahoma next at $1.41.