This blog is the first in a three-part series examining what rising gas prices reveal about the U.S. transportation system. As global disruptions push fuel prices higher, this series explores how Americans are affected, how people adapt, and what a more resilient transportation future looks like.
By Leslie Vasquez and Chris McCahill
When gas prices spike, millions of Americans have little choice but to pay the bill. That is not just a cost problem. It is a sign that the U.S. transportation system rests on a fragile foundation shaped by land use and infrastructure that require a car for most everyday trips. At the same time, the transition to electric vehicles remains slow and uneven.
Since February, the war in Iran has increased gas prices by approximately $1 per gallon, a 34% jump. While fuel prices remain lower than in many other countries, in part because the U.S. is a major energy producer, it is not immune to global disruptions. The sudden increase highlights how vulnerable Americans are to fluctuations in global oil markets.
That vulnerability exists partly because for most Americans driving is not optional. It is often the only practical way to get to work, buy groceries, take children to school, or access healthcare needs. When the cost of driving rises quickly, households have few alternatives.
Those fuel costs have ripple effects throughout the economy. According to some reports, the U.S. Postal Service has considered an 8% increase in the cost of shipping certain packages, and United Airlines has signaled a 20% increase in the cost of flights.
But the price of gasoline is only part of the story. Car ownership itself has become increasingly expensive, up 40% since January 2020. Higher vehicle prices, rising insurance premiums, and higher interest rates have pushed the total cost of owning and operating a vehicle steadily upward. Not only does this stretch households thin, but it affects the way we fund and operate our transportation systems more broadly.
We are already seeing those impacts. The state of Georgia suspended fuel taxes to soften the blow for drivers, and other states have considered a similar move. While politically popular, these kinds of measures expose the deeper structural problem of transportation funding in the U.S., which is heavily dependent on fuel taxes. Georgia’s tax break will cost the state $196 million per month, according to the Institute on Taxation and Economic Policy, saving most families just $13. Meanwhile, the Highway Trust Fund, which depends on federal fuel tax revenues, is already insolvent.
This vulnerability, however, is not inevitable. Rapid electrification could drastically cut our dependence on international markets and help stabilize transportation costs. This was a major aim of the previous federal administration, which offered generous incentives for electric vehicles and sent money to states to build a network of charging stations. Despite promising state-led efforts, electrification has seen major setbacks in the last year.
There is an even greater opportunity, however, in providing a range of clean and convenient travel options when the cost of driving becomes too much to bear. Research shows that higher gas prices push people from driving toward walking, biking, and public transit. This is much easier in some places than others.
For example, transit use rose considerably across Europe in response to higher gas prices following Russia’s invasion of Ukraine. Although many households across the U.S. are more dependent on cars, there are clear opportunities and signs that Americans can adapt just as easily under the right circumstances, which we will explore in the next two parts of this blog series.
While the current situation is putting additional strain on already stressed households, it also creates an opportunity to move away from the status quo and its associated risks. An important question to ask is not just how often these disruptions will occur in the future, but whether our transportation system can handle them when they do.
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