Gasoline prices are moderating slowly in 2025 even as the inflation-adjusted price rises to $3.27.
Gasoline actually averaged $3.27 in the first half of 2025, dead on the money for what it should cost if it were only adjusted for inflation since 1978.
Gasoline retailers like convenience stores don't make their money on gasoline, with profit margins on gasoline in the 2% range. They make it on stuff like milk, the free-market price of which is a great mystery. AI thinks the unregulated price of milk right now would be about $4.00/gallon.
At the corner convenience store near where I live, a gallon of whole milk is a whopping $4.99, but eight miles down the road at my grocery it's only $3.45, so it's a mark-up of 45% for the convenience.
But my grocery offers a routine discount coupon of 60 cents per gallon of milk, which brings the price down to $2.85, which Sam's can't beat at $3.23. Milk is my grocery's loss leader to get me in the store, like rotisserie chicken is a loss leader for Sam's and Costco, or like gasoline.
Gasoline this morning at Sam's is $3.01/gallon.
My momma told me, you better shop around.
Meanwhile average fuel economy in 2023 is 27.1 miles on a gallon of gasoline, up from about 17.6 in 1978.
Seems like we should be doing better in that department.
