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ECON 101 The Strait Story: Thinking about Gas Prices
By Robert Eyler E nergy markets have moved to center stage in daily news coverage for geopolitical reasons. For North Bay residents, gas stations are among the most visible places to see daily prices. While energy markets are broader than just petroleum and gas at the pump, oil market dynamics influence gasoline prices and indirectly affect many markets. When those prices rise, they act as a multilayered regressive tax. The burden of this ‘tax’ falls most heavily on lower- and middle-income
households that commute or cannot easily shift to more energy-efficient transportation, goods or services. From a public policy standpoint, when gas prices increase, another layer of pressure on social mobility and economic equity emerges. This is also true for smaller businesses, which may be affected directly by rising gasoline prices (using their business vehicles or relying on delivery systems that may now be more expensive, making it harder to pass rising fuel costs on to customers) or indirectly (customers may purchase less, reducing price flexibility).
The figure shown here compares the wholesale price of oil, crude oil before refining, with the national average price of gasoline. The data are seasonally adjusted to remove some of the bumps, but I will close with some important (I think) considerations about gas price seasonality. These figures represent monthly averages from January 2000 to April 2026. Notice the far-right hand side and the purchasing- power outcome of the recent changes. The summer of 2008 saw a more dramatic spike, but that does not undermine the current pain. From a policy standpoint, rising gas prices create multifaceted concerns
Wholesale Oil (West Texas Intermediate and Brent Crude) and Retail Gasoline Prices, National US 2017 Dollars, Seasonally Adjusted, Jan 2000 to April 2026. Source: Federal Reserve (FRED); WTI and Brent on left axis, Gas Price on right axis.
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