Here’s How Much Rising Gas Prices Could Cost American Households This Year

by Joe Rutland
(Photo Courtesy Getty Images)

Americans are dealing with rising gas prices these days. It is an issue that affects households all over the place and their budgets. With the rising gas prices not going away anytime soon, how much could they cost American households? If some family has to travel a lot for work in a big city, then it’s going to cost a heck of a lot.

What To Know

  • Rising gas prices are hitting Americans in their pocketbooks.
  • Some of this has happened due to economic recovery from pandemic.
  • Labor Department cited consumer prices rising 7.9 percent in February.
  • These rising gas prices could add additional $2,000 to household budget.

Rising Gas Prices Are Hitting While Inflation Keeps On Soaring

Let’s take a look at a recent analyst note from Yardeni Research. It estimates that rising gas prices triggered by the Russian invasion of Ukraine could add up to $2,000 in annual costs to the typical household budget. That’s on top of another $1,000 in additional costs for food.

On Thursday, the average price for a gallon of gas was at $4.23 nationwide, according to AAA, up from $2.87 one year ago but down slightly from last week’s level. In California, prices are as high as $6 a gallon. Until this month, prices had not topped $4 a gallon nationally since 2008. 

A lot of people will say that the Russian invasion of Ukraine has caused this. Then, there’s the faster-than-expected economic recovery from the COVID-19 pandemic. That’s all triggered the highest inflation in decades amid strong consumer demand, an influx of government stimulus, and disruptions in the global supply chain. 

Labor Department Reported Consumer Prices Were Rising

Earlier in March, the Labor Department reported consumer prices rising 7.9 percent in February, which is the fastest pace since 1982 when inflation hit 8.4 percent. This did take place before Russia’s invasion of Ukraine.

International benchmark Brent crude went above $120 a barrel on Wednesday. European Union nations were considering becoming aligned with the United States in banning Russian oil imports and as Russia-Ukraine talks appeared to yield no signs of success. We get more about this from Fox Business.

Surging gas prices have prompted lawmakers across the country to look for ways to provide some relief for motorists. Georgia and Maryland became the first states to suspend their gasoline taxes last week, and lawmakers in Illinois, Massachusetts, Maine, Michigan, New York, Tennessee, and Virginia are considering similar proposals.

Here’s some more info for you about gas prices. Estimates from the Penn Wharton Budget Model show that suspending the federal gas tax of 19 cents per gallon through the end of the year would result in just $50 of savings for the average driver, based on current gas prices.