Energy Economy

Extremely High Gas Prices to Last to 2023

President Biden was asked how long gasoline prices would stay higher. His response, according to Bloomberg, “As long as it takes, so Russia cannot in fact defeat Ukraine and move beyond Ukraine.” Military experts believe that war could go on for years.

High gas prices are as critical a political opponent as Biden has. With elections in both 2022 and 2024, inflation will be a major issue, if not the determining one. Gas prices have been over $5 per gallon for regular nationwide. Further geopolitical unrest could push this number higher. A recession could reverse the trend, if it is deep enough to substantially curtain demand.

Gas prices can take a large bite out of household budgets, particularly for Americans with low wages who have to drive any substantial distance. For those who drive several hundred miles each month, the additional cost with higher prices can be well above $100.

Cars or light trucks that get poor gas mileage can face increases closer to $300. For a family with an after-tax income of under $2,500, this burden is tremendous

The cost of gasoline undercuts consumer spending in many low- and middle-income households. As the end of the year approaches, this means that the most important period for America’s large retailers faces a difficult problem it cannot solve.

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