Gas Prices in 2006

The 2006 average was $2.57, 30.2¢ above 2005 and 9.8% higher after inflation. The year began at $2.24 and rose sharply in spring. The largest weekly increase, 13.8¢, came in the week of March 20.

Part of the spring rise came from a change in fuel. In 2006, refiners stopped blending the additive MTBE into reformulated gasoline and replaced it with ethanol, completing the switch by May. The EIA estimated the change added about 129,000 barrels a day of ethanol demand, roughly a 50 percent increase over 2005 ethanol production, and reported ethanol shortages that contributed to higher prices in March and April. Crude oil prices were also higher.

The high came in summer: $3.04 in the week of August 7, as conflict in Lebanon and a pipeline shutdown at the Prudhoe Bay oil field in Alaska added to crude prices. Prices then fell steeply. The monthly average dropped from $2.95 in August to $2.25 in October, and the year’s low, $2.20, came in the week of November 6.

2006 ranks higher after inflation than before it: 11th of the complete years since 1970 in inflation-adjusted terms, against 15th in current dollars. Its real average, $4.11, was above that of every year from 1986 through 2005, the closest being 2005 at $3.75. That mark was passed the very next year; the later years with a higher inflation-adjusted average are 2007, 2008, 2011, 2012, 2013, 2014, and 2022. Over five years the change was large: the annual average was 81.1% higher than in 2001 in current dollars, or 59.1% higher after inflation.

Price levels had shifted so far that the cheapest week of 2006, $2.20 on November 6, 2006, cost more than the most expensive week of 2004, $2.06. Four years earlier, in 2002, the annual average had been $1.35.

In EIA’s state estimates, which average all grades, Washington had the second-highest price in 2006, $2.71, or 19.0¢ above the U.S. figure, behind Hawaii at $2.96 and ahead of Alaska at $2.66. Georgia had the lowest, $2.35, extending a run that began in 1987, followed by Oklahoma at $2.40.

At the pump, gasoline went from $2.27 in 2005 to $2.57 in 2006, a rise of 13.3%, and then to $2.80 in 2007, a rise of 8.7%. Measured in constant 2025 dollars, the change from 2006 to 2007 was a rise of 5.7%.

Back in 1996 the U.S. average at the pump was $1.22, and the change from 1996 to 2006 in constant 2025 dollars was a rise of 63.6%. The 1996-to-2006 span straddles the 2000 change of basis; from 2000 the national figure is the mean of EIA's weekly U.S. regular-grade retail prices. The 2012 figure of $5.08 is the highest annual average in constant 2025 dollars across 1970–2025, and 2006 stands at $4.11 on that same basis.

Across the 52 weeks of EIA data in 2006, the highest and lowest weekly prices differed by 83.8¢. The all-grades state averages for 2006 come from the EIA State Energy Data System, and they run from Georgia at $2.35 to Hawaii at $2.96, a difference of 60.6¢ between the lowest-priced and highest-priced state. On that state basis, 29 of 51 states, D.C. included, recorded a 2006 average above the U.S. average.