EnergyCommentary
Who Gets Hurt From High Gas and Diesel Prices? There’s More Harm Than You Think.
Daren Bakst /
@darenbakst /
Rachael Wolpert / September 24, 2022
High gas prices have sweeping economic effects. Beyond the pump, gas affects the prices of food, clothing, household goods, and even services like the police and emergency medical services. Pictured: Gas prices at a Loves gas station on Sept. 12, 2022, in Bensenville, Illinois. (Photo: Scott Olson/Getty Images)
Commentary By
Daren Bakst @darenbakst
Daren Bakst analyzes and writes about regulatory policy, trade, environmental policy, and related issues as a senior research fellow in regulatory policy studies at The Heritage Foundation.
Rachael WolpertRachael Wolpert is a research assistant at the Center for Energy, Climate, and Environment at The Heritage Foundation.
High gas and diesel prices like those we are experiencing now have sweeping negative economic effects on Americans. Beyond the financial hit at the pump, the economic harm is inflicted in many ways that may not be evident to most.
The Center for Energy, Climate, and Environment Briefings
This is article No. 1 of 5 exploring “What You Need to Know About Gas Prices.” This series looks at everything from what goes into the price of a gallon of gas to recommendations for policymakers to bring prices down. Click HERE or see the end of this piece to find links to other articles in this series.
For example, prices for goods such as food, clothing, and household goods are higher than they otherwise would be since gas and diesel play an important role in supply chains. And there could be higher costs and reduced services for critical functions like police and emergency medical services because of their heavy reliance on fuel to carry out their duties.
Americans have recently experienced this firsthand as prices have skyrocketed. As of the week of September 12, retail prices for
regular gasoline averaged $3.69 per gallon,
54% higher than when President Joe Biden took office in January 2021. Diesel prices are 84% higher, averaging just above $5 per gallon. And these are below the record highs we saw this past summer.
The following explains the importance of motor gasoline and diesel in general and highlights just some of the harms caused by these significantly higher prices.
Importance of Motor Gasoline and Diesel
Energy affects almost every facet of American life, and data show just how critical gasoline and diesel are for Americans.
One of the most important energy sources is petroleum, which, as the Energy Information Administration
explains, has historically been the largest major
energy source for total annual U.S. energy consumption. Petroleum is used to create many products, including motor gasoline and diesel, and in 2021, petroleum met
around 90% of America’s transportation needs.
Motor gasoline (the most consumed petroleum product)
accounted for about 44% of total U.S. petroleum consumption.
Distillate fuel oil, which includes diesel fuel and heating oil, was the second most consumed petroleum product in 2021 at
about 29% of total U.S. petroleum consumption. Diesel fuel is used for transportation such as buses, boats, trains, and some cars, but it’s also used for heavy construction equipment, tractors, and electricity generation.