A shortage of gas stations is already affecting the economy. People have to leave work earlier to drive to the closest station to refill.
Jim Glock, former policy adviser to the National Economic Council, said in an email that if gas was running at $2 a gallon, we would have an economic impact “much larger than what we are seeing now.”
“Saving a dollar a gallon on gas will translate into a $10 to $25 billion shift of income over the course of a year,” he said. “That really matters for families with children.”
So far, though, things are not as bad as they might have been. “Travel to the highway, vacations, visiting relatives — they all have to happen,” Mr. Glock said.
But without respite from high gas prices, the toll is clear:
Spending on fuel increased 1.7 percent from 2015 to 2016, according to data from the Bureau of Economic Analysis, the Federal Reserve Bank of New York and various economists. Spending on food and non-fuel is growing faster — it has expanded by 3.4 percent over the same period.
Those increases are most pronounced among the lowest income households. They were hit harder by fuel prices in 2015, the last year that crude oil prices rose dramatically.
What will happen as gas prices drop? Most economists expect some easing, but still a higher price:
Two-thirds of the forecasted decrease in inflation by 2025 occurs in the highest inflation bracket, and higher gasoline prices are already driving prices higher.
Also, investment in travel is going down as higher gas prices influence decisions on where to travel, according to CNN Money.
“Just because prices are going down doesn’t mean consumers will buy more planes, trains, cars, vessels or to change the use of energy,” Mike Doyle, director of the center for energy and the environment at the University of Oklahoma, told the news site.