Iran War Has Cost Americans $17 Billion In Gas
According to one group of energy experts, Americans have paid $17 billion more for gas and diesel since the war began. That is not the total fuel cost. It is just the price increase based on what people are paying, in addition to what they were paying three weeks ago. It is the cost of the “price “” price hike” Heat Map reported. It is based, in more detail, on people paying an extra $1.25 per gallon for gas.
 “If you think about an individual paying $1 or $1.50 more for gasoline, that’s often just a nuisance,” said Jeff Colgan, an author of the analysis and a political science professor at Brown University. But as a country, we consume 370 million gallons of gasoline per day. So when you add that all up, this is more than just a nuisance for the country. This is a major cost.”
And it is more complex than the extra few dollars it costs to fill up. If past gas shortages are any indication, high gas prices trigger inflation. Nothing proves this better than the increase in oil and gas prices after the start of Russia’s invasion of Ukraine. In March 2022, oil prices rose above $100. Gas hit $5 in June. The June CPI that year rose 9.1%, the largest jump in two decades.
When the BLS released the June 2022 figures, its experts commented,” The energy index rose 7.5 percent over the month and contributed nearly half of the all items increase, with the gasoline index rising 11.2 percent and the other major component indexes also rising.” Why did food prices go up? In part because of the increase in diesel. All along the American food supply chain, energy became a critical contributor.
Gas prices are a major part of American household budgets. Most experts put the annual cost of gas for Americans at $2,400. A 50% increase adds $1,200. The median household income is $85,000. After taxes, that is closer to $70,000. Gas prices eat into a substantial income
The Federal Reserve of St. Louis puts consumer spending at 70% of GDP. Households with tight budgets do not tend to be spenders. Therefore, a drop in consumer spending can trigger a recession.
And today’s problem has a double effect. One is GDP-based, and the other is inflation-based. When added together, they are a vice on the economy, pressuring it from two sides.
Oil prices dropped when it appeared there was a truce in the Iran war. As that truce becomes unstable, the price of oil and gas stays high. Americans pay for that at the pump every day.
