As gas prices rise, our confidence plummets

If even a single drop of gasoline is needed to get a product from where it’s created to your front door, expect the cost of that product to increase.”

Remember when gasoline cost just $2.84 per gallon? That might seem like a lifetime ago, now that drivers are finding prices closing in on $5 for regular. But believe it or not, it was just a year ago.
It may be impossible at times to think beyond our own family budgets when it comes to skyrocketing fuel costs, but the cost at the gas pump affects everything around us that isn’t sourced and produced in our own backyard. And that’s pretty much everything — groceries, clothes, medicine, even this newspaper. If even a single drop of gasoline is needed to get a product from where it’s created to your front door, expect the cost of that product to increase.
We haven’t seen a surge in gas prices like this since 2008, when the tail end of a decade-long energy crisis spiked the cost per gallon by more than 35 percent over the previous year, according to the U.S. Energy Information Administration.
Something needs to give, and soon. Democrats in the Nassau County Legislature want to provide a little bit of help by suspending the gasoline sales tax here. That’s a 4.25 percent levy, which last year amounted to 12 cents per gallon, but is now up to 19 cents. A savings of $2 to $3 per fill-up might not seem like a lot, but that would add up.
Sure, Nassau would lose money under that proposal, but the county has been making at least an extra nickel per gallon over the last several months, so it could still finish ahead.
Lawmakers in Albany want to take it a step further by suspending state gas taxes. That would be a heftier savings — nearly 48 cents per gallon. But unlike Nassau, the state hasn’t made any extra money during the gas price surge, because its taxes are flat, not a percentage. The state took 48 cents out of every $2.84 gallon of gas purchased a year ago, and is taking 48 cents out of every $4.47 gallon of gas purchased today.
That money — more than $1 billion a year — goes toward maintaining our highways and bridges, and provides hundreds of millions of dollars to the Metropolitan Transportation Authority. There was no windfall there, and so any losses, as Gov. Kathy Hochul has pointed out, could have devastating effects on New York’s already stressed infrastructure.
If Nassau were to indeed suspend its sales tax, and if Congress temporarily slashed federal taxes — which account for more than 18 cents per gallon — gas prices could fall nearly 10 percent. That is, if other factors don’t keep pushing those prices higher.
Congress doesn’t appear ready to do much of anything, and neither does the Republican majority in the County Legislature. County Executive Bruce Blakeman even went so far as to blame America’s dependence on foreign oil as the key cause of the crisis, and to push for the reopening of the controversial Keystone XL pipeline.
Yet only 20 percent of the oil consumed in America is imported, and most of that comes from Canada. Before Russia invaded Ukraine, its oil accounted for just 2 percent of the American supply. It’s not our dependence on Russian oil, but instead the dependence of other countries — especially European ones — that drives up the price.
America already exports more oil than it imports, according to the Energy Information Administration. So it’s really unclear how much of an impact opening more domestic sources would have. And when it comes to Keystone XL, it was designed to transport Canadian oil to the U.S.
There could be some light at the end of the tunnel. After gasoline prices jumped to more than $3 per gallon in 2008, the average price plummeted to $1.84 the following year, according to the EIA. But credit the Great Recession for that.
Another severe recession would be the worst way to solve this crisis. But if our elected leaders don’t come together and act soon, an economic crash is most assuredly in our future.