The price at the pump probably sent a shockwave through your system over the last few months. And while these sky-high prices seem to be cooling off more recently, they’re still a force to be reckoned with regarding inflation and other economic issues. Here, we debunk some of the most common misconceptions about gas prices and provide critical insight that may help the shock value.
Gas Tax Holidays Are a Solution
A relatively large area of concern for those seeking a gas tax holiday is how brief the relief is. Some states don’t see the tax relief, while those who received the holiday only saw relief for a short period.
The issue, in this case, is that the decreased price leads to an uptick in demand, so the gas tax holiday may not be the most feasible solution in the long run. It’s essential to remember that the built-in tax is only a fraction of the total price, and the long-term benefits typically end up in the wrong hands.
American Consumers Are Victims of Price-Gouging
Across the board, many agree they feel they are the victims of severe price-gouging. Consumers across the nation blame gas station owners for taking advantage of inflation and, in turn, receiving their payday.
While it is true there is an extreme disconnect between the face value price and the price at the pump, price-gouging is not the source. When we look at refining in the US alone, there is a 90 percent capacity rate, and some refineries are closed altogether, creating an uptick in demand for those still functioning.
Production Can Help Decrease the Price
A significant cause for the rapid spike is that the demand post-pandemic surged faster than the on-hand supply could sustain. This bounce back created an alarmingly inflated price. So a viable solution to restore balance may seem like increasing production to help alleviate the price jumps. A common trend with oil and gas is restoring the balance in supply and demand, though it isn’t always appropriate or reliable at the consumer end.
Unfortunately, many companies claim they cannot and will not increase their production to mitigate the consumer’s prices. Most high-profiting companies are funneling their profits back into pandemic debts or investors rather than production.
Gas Prices Hurt the Economy
It’s easy to equate sky-high gas prices to an economic downturn. But it’s essential to separate the two and factor in all the hands at play. Gas is not the entire economy, just like the economy is not solely dependent on tolerable gas prices. Debunking this common misconception about gas prices can help bring closure to the debate and set the sights on a brighter economic future.
If you’re struggling to keep your head above water with the gas price, consider filling your tank once it hits half full. This can help you decrease your cost while keeping your tank happy.
