Gasoline Prices at Record Highs Undermine America’s Auto Obsession


Every time gasoline prices rise, the same questions arise: why are gasoline prices so high? Who is to blame? What will bring them down?

These are not terrible questions, and they make sense in a country where the most people own cars. But the fact that we continue to have these questions decade after decade suggests that they too are insufficient. They focus on weak, short-term solutions that elected officials, eager to avoid blame for the proverbial pain at the pump, rush with. The president draws on his reserves. Governors suspend gasoline taxes. It doesn’t matter that these stopgap measures don’t do much to scare off consumers until prices come down. Indeed, on Tuesday, President Joe Biden announced his intention to increase the production and sale of ethanol-blended gasoline; This comes just weeks after he announced plans to release millions of barrels of oil from the strategic petroleum reserve.

Why does gasoline price volatility have the power to cause so much pain? The answer, of course, is parked in American driveways.

A better question might be: why does gasoline price volatility have the power to cause so much pain? The answer, of course, is parked in American driveways.

AAA calculated last year that gas only accounted for 16% of the annual cost of owning and driving a compact SUV 15,000 miles (the annual average). Last month, the national average price per gallon reached $4.34. We’re already down from that peak, but if it were sustained for a year, gasoline would only reach 25% – 1 in 4 dollars – of the cost borne by the same vehicle owner.

What this tells us is that when it comes to costs, gasoline isn’t the crux of the matter – cars are. What spikes in gas prices do is puncture the fantasy that our transportation system, overly dependent on cars, is sustainable.

This fantasy persists because so many household vehicle costs are hidden. (This does not mean externalized costs.) Gas station signs are highly visible, but the many costs of owning and operating cars are spread across our budgets, often self-paying: financing, depreciation, insurance, repairs, maintenance, taxes, fees, fines , parking, tolls. Gasoline prices rise and fall, sometimes violently, before our eyes, but these other costs, which are easier to ignore, keep rising.

the average price of a new car reached a new high last year at $47,000. The aggressive marketing of car manufacturers for more expensive and larger vehicles – which require long-term debt, push budgets to their limit and tend to consume more fuel – making gas price spikes far more painful than they should be for middle-class people. Since periods of low gasoline prices seem to contribute to amnesia about their volatility, light trucks, vans and SUVs now sell for 3 times more than cars. It is primarily these buyers who put pressure on politicians, who respond by nurturing the belief that lower gas prices are the ultimate answer.

What is essential is that while a small proportion of household spending on vehicles goes to the government to help fund roads, most goes to the giant corporations that sell cars, provide car loans and provide car insurance. As a result, our transport system generates inequalitiessucking dollars from low- and middle-income families, small businesses and local communities and spraying them not only on big oil companies, but also on big banks, big insurance companies and big autos.

And while high gas prices inevitably hurt low-income workers the most, the costs of car ownership crush the poor, regardless of gas prices. An unlikely source, an Applebee executive, recently pointed out how many people have to work longer hours to pay for the car they need to get to work. He’s been rightly reviled, but he’s got it right: our reliance on cars can trap people in bad jobs, while companies big enough to withstand gas spikes benefit from it in ways we do not imagine.

Many supporters of maintenance of the gas supply to the detriment of working-class families, but too many offer the wrong solutions, including the predictable calls for more domestic drilling. But all the evidence – social, economic, environmental — demonstrates that we need to reduce our dependence on gasoline, and now. Electric cars can help, but waiting for the car to solve the car’s problems has brought us to this point: the precipice of disaster.

We’ve been waiting decades for electric vehicles to save us a minute. They count today for less than 1% of vehicles on our roads. Perpetuating the belief that cheap gas or electric cars will solve our transportation problems doesn’t just focus too narrowly on automotive solutions — it’s slowed progress on non-automotive solutions. Transit critics who complain that it can take decades for transit investments to be realized argue that nimble private companies can bring about a better future faster. They were wrong.

So what to do? We need to make it safer and easier for people to be able to drive less and be more mobile through smarter planning, low-cost pedestrian and cycling infrastructure, and vastly improved and expanded public transit. And if owners realize they may be spending more on their vehicles than they imagined and can spend less to get what they need, they can help make the next price spike of gasoline less painful.


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