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Record gas prices hit working class Americans with inflation already surging

Argenis Dominguez fueling up his SUV at a gas station in Boston. He drives Uber for a living and says the higher gas prices mean less money in his pocket.
Chris Arnold
Argenis Dominguez fueling up his SUV at a gas station in Boston. He drives Uber for a living and says the higher gas prices mean less money in his pocket.

Cars are lined up waiting at the pumps at a discount gas station in Boston's Jamaica Plain neighborhood. Gas is about 20 cents cheaper here than in other places. But it's still $4.19 a gallon.

"I need to use the gas every day for making money," says Uber driver Argenis Dominguez. He's filling up his Toyota Highlander, which is not the hybrid model so it guzzles more gas. "Yeah a lot," he says. "$50 or $60 a day."

The average price of gas in the U.S. is now a record $4.32 per gallon. In some places it's much higher. That's getting painful for people on modest incomes, especially if they have long commutes or need to drive a lot.

Russia's invasion of Ukraine is pushing up gas prices at the same time broader inflation related to the pandemic has driven up the cost of many other goods.

"It's scary," says Renea Paige at another gas pump. "You do cringe because it's like, OK, the meat prices are so high, do I cut back on that and get something different?" she asks. "I feed a family. It's like eight of us, so yeah, it can be very difficult."

Joe Brusuelas, chief economist with the Wall Street research firm RSM, says it's been a few generations since prices for so many things including gas have gone up at once. "Rising prices will disproportionately hit poor, working class, and middle class Americans."

Brusuelas predicts Americans will "experience a once in a lifetime source of sticker shock through the remainder of the year." Once in a lifetime because an oil shock coupled with broader inflation hasn't hit the U.S. since the mid 1970s.

That said, back then oil price shocks were much more damaging, according to James Bushnell, an energy economist at UC Davis.

"Back then the economy was much more dependent on oil as an input to a lot of different economic activity," he says. For example, manufacturing was a much bigger part of the economy and far more electricity generation used oil.

But these days it is different. Most companies don't use much oil. Less than 1% of electricity comes from oil-powered plants. Most people don't heat their houses with oil anymore.

Those big signs at gas stations make us notice the price of gas all the time. But Bushnell says most cars and trucks are much more fuel efficient these days.

"The rule of thumb is the average customer uses about 400 gallons per year," he says. "So when when the price goes up by $1 a gallon, we're looking at another $400." He says that's not nothing, but it's not enough to cause major damage across the economy.

That's on average though. Some people barely drive at all, while others have long commutes or live in rural areas where long drives are unavoidable. So some people get hit much harder.

At the gas station, Dominguez, the Uber driver, is trying not to let the price of gas get him down. On the bright side, he says, as the pandemic keeps winding down he's getting a lot more business driving customers. And he's a single guy without a lot of expenses.

"I don't care and try to live in life every day," he says. And if it gets too expensive to live in Boston, his backup plan is to move back to the Dominican Republic where he can live cheap. "Live in the tropics, relax," he says. "That's fine."

There are signs too that many people are willing to tolerate the shock, at least briefly, because they understand the sudden surge in gas prices is due to Russia's invasion of Ukraine. A recent Wall Street Journal poll found 79% of Americans supported a ban on Russian oil imports to the U.S., even if that means even higher gas prices.

Copyright 2022 NPR. To see more, visit https://www.npr.org.

NPR correspondent Chris Arnold is based in Boston. His reports are heard regularly on NPR's award-winning newsmagazines Morning Edition, All Things Considered, and Weekend Edition. He joined NPR in 1996 and was based in San Francisco before moving to Boston in 2001.