Rising Gas Prices

Written by: Paige Grunewald

 

Gas prices rising has been a huge problem as of late. Gas prices right now in the United States average $4.10 per gallon. For the lower class to middle-class Americans, gas prices have become unaffordable. Gas is vital in almost every American citizen’s life, yet the price yields a premium that not everyone can afford. One question is in almost every head. How can our politicians lower gas prices? Gas prices can be lowered through gas tax suspension, reducing oil exports, and tapping into the country's oil reserves. 

The first thing our government could do is in the short term, suspend the gas tax. According to CBS, “Two Democratic senators have introduced legislation to suspend the federal gas tax for the remainder of the year. At 18.4 cents a gallon, dropping the tax could offer meaningful relief for consumers. It would save a typical SUV driver nearly $3 every time they fill their tank.” Although this sounds extremely promising, the downsides include adding to our already massive debt. According to Urban Institute which is a research nonprofit focused on elevating the debate around social and economic policy, “State and local governments collected a combined $52 billion in revenue from motor fuel taxes in 2019, or 1.5 percent of general revenue.” Even though 1.5 percent doesn’t sound substantial with how large the government’s revenue is, it is still a large portion of the money. In 2019, state and local motor fuel tax revenue accounted for 26 percent of highway and road spending. That tax is ¼ of the highway and road spending. Without that revenue, there is less money for improving and maintaining our roadway. However, the upsides outweigh the downsides. The suspension would not last forever, likely for a couple of months, and would vastly help the lower and middle class. 

Next, reducing oil exports. According to the US Energy Information Administration, “In 2021, the United States exported about 8.63 million b/d of petroleum to 176 countries and 4 U.S. territories.” Instead of selling this fuel, we could keep a percentage of it and reallocate it to our gas pumps. A potential issue that could arise is that on the global stage, other countries could also clamp down on their oil exports and could drive up gas prices more. Our economy relies heavily on globalization and if other countries stop contributing, it can mean huge supply issues. However, only keeping a percentage of our exports could potentially solve this problem. 

Finally, dipping into our reserve oil. We’ve already seen President Biden take barrels of oil out of the reserve. This is a short-term fix, but it does temporarily give relief. A problem with this is that the price will go back up pretty quickly after releasing the barrels. The short-term relief does help many Americans get a much-needed break from the extremely high prices and therefore is beneficial. 

In conclusion, the application of gas tax suspension, reducing oil exports, and tapping into the country's oil reserves will aid in lowering the United State’s gas prices.

Works Cited

AAA Gas Prices, https://gasprices.aaa.com. Accessed 11 April 2022.

“Frequently Asked Questions (FAQs).” EIA, 9 March 2022, https://www.eia.gov/tools/faqs/faq.php?id=727&t=6. Accessed 11 April 2022.

“Gas Station Price Charts - Local & National Historical Average Trends.” GasBuddy, https://www.gasbuddy.com/charts. Accessed 11 April 2022.

Ivanova, Irina. “What can politicians do to lower U.S. gas prices?” CBS News, 28 March 2022, https://www.cbsnews.com/news/gas-prices-inflation-us-president-cbs-news-explains/. Accessed 11 April 2022.

“Motor Fuel Taxes.” Urban Institute, https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/motor-fuel-taxes. Accessed 11 April 2022.