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December 2006, Vol. 129, No. 12
Price and expenditure measures of petroleum products: a comparison
Abby L. Duly, Jeffrey A. Harris, Ara M. Khatchadourian, Rozi T. Ulics, and Melissa C. Wolter
Political events in oil-producing countries, hurricanes in the Gulf of Mexico, and increasing global demand for petroleum products have all contributed to sharp increases in recent years in prices of crude oil and of petroleum products derived from crude oil. From January 2000 to July 2006, the average price for a gallon of unleaded regular gasoline in the United States increased 130.5 percent.1 Personal consumption expenditures on gasoline rose from $175.7 billion to $287.3 billion from 2000 to 2005.2 Rising prices and increasing expenditures are a concern for consumers, business leaders, and Federal policy-makers. As a result, reliable information on the prices and costs of crude oil and petroleum products is more vital than ever in making decisions at all levels of the economy.
The Bureau of Labor Statistics (BLS, the Bureau) conducts price and consumer expenditure surveys that measure both changes in prices of, and expenditures for, petroleum products throughout the various levels of the economy. This article introduces the programs that carry out these surveys, describes the petroleum data compiled by those programs, explains the methodology underlying the various crude-oil and gasoline surveys, and provides historical comparisons of price data across the BLS programs.
Price and expenditure programs
The Bureau conducts three price surveys and a survey of consumer expenditures: the International Price Program (IPP), which measures import and export prices; the Producer Price Index (PPI), which measures prices received by domestic producers; the Consumer Price Index (CPI), which measures consumer prices paid out of pocket; and the Consumer Expenditure Survey (CE), which measures out-of-pocket consumer expenditures. Chart 1 illustrates the high correlation among the three price indexes. (Two different PPI’s are shown.) Each program has a different scope, measurement goal, and methodology for collecting and compiling data related to crude oil and petroleum products, and the differences among the programs must be understood in order to properly interpret and compare the movements among the respective indexes. A description of each program’s measures of petroleum product prices and expenditures follows. The appendix presents an exhibit summarizing the program methodologies.
This excerpt is from an article published in the December 2006 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 Bureau of Labor Statistics, Consumer Price Index, average price data, on the Internet at the BLS Website, www.bls.gov/cpi/home.htm.
2 National Income and Product Accounts, Table 2.3.5, "Personal Consumption Expenditures by Major Type of Product" (U.S. Department of Commerce, Bureau of Economic Analysis), on the Internet at www.bea.gov/bea/dn/nipaweb.
Consumer Expenditure Survey
Consumer Price Index
Import/Export Price Indexes
Producer Price Indexes
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