Consumer Corner
What’s in the price of a gallon of gas?
Robert I. Harris, Georgia Institute of Technology
The U.S. Energy Information Administration expects nationwide retail gasoline prices to average near US$4.30 a gallon for April 2026 – the highest monthly average of the year. The political response has been familiar. Georgia has suspended its state gas tax, other states are weighing their own tax holidays, and the White House has issued a temporary waiver of a law known as the Jones Act in hopes of moving more domestic fuel to East Coast ports.
As an energy economist, I am often asked about what contributes to gas prices and what different policies can do to affect them.
The price of a retail gallon of gas is the sum of four things: the cost of crude oil, refining, distribution and marketing, and taxes.
In nationwide figures from January 2026, crude oil accounted for about 51% of the pump price, refining roughly 20%, distribution and marketing about 11% and taxes about 18%. That mix shifts with conditions: When crude oil prices spike, that can drive more than 60% of the price; when the price drops, taxes and logistics are larger shares of the cost.
Crude oil is the biggest ingredient
Because the price of crude oil is the largest element, most of the price at the pump is derived from the global oil market.
Usually, big swings in crude prices come mainly from shifts in global demand and expectations – not from supply disruptions, according to widely cited research in 2009 by the economist Lutz Kilian.
But what is happening in early 2026 with the war in Iran is one of the exceptions: a classic supply shock. Severe disruptions to shipping through the Strait of Hormuz and attacks on Middle East oil infrastructure have taken millions of barrels a day off the global market.
Most drivers generally can’t quickly reduce how much they drive or how much gas they use when prices rise, so gasoline demand doesn’t change much in the short run. That means a jump in crude costs tends to result in people paying more rather than driving less.
Refining, regulations and the California puzzle
Refining turns crude into gasoline at industrial scale. The U.S. doesn’t have a single gasoline market, though. Roughly a quarter of U.S. gasoline is a cleaner-burning blend of petroleum-derived chemicals called “reformulated gasoline,” which is required in urban areas across 17 states and the District of Columbia to reduce smog.
California uses an even stricter formulation that few out-of-state refineries make. California is also geographically isolated: No pipelines bring gasoline in from other U.S. refining regions.
California’s gasoline prices have long run above the national average, explained in part by higher state taxes and stricter environmental rules. But since a refinery fire in Torrance, California, in 2015 reduced production capacity, the state’s prices have been about 20 to 30 cents a gallon higher than what those factors would indicate.
Energy economist and University of California, Berkeley, professor Severin Borenstein has called this the “mystery gasoline surcharge” and attributes it to the fact that there isn’t as much competition between refineries or gas stations in California as in other states. California’s own Division of Petroleum Market Oversight says the surcharge cost the state’s drivers about $59 billion from 2015 to 2024. It’s not exactly clear who is getting that money, but it could be gas stations themselves or refineries, through complex contracts with gas stations.
Getting the gas into your car
The distribution and marketing category covers the costs of everything involved in getting the gasoline from the refinery gate to your tank.
Gasoline moves by pipeline, ship, rail and truck to wholesale terminals, and then by local delivery truck to service stations.
At the retailer’s end, the key factors are station rent and labor, the cost to buy gasoline in bulk to be able to sell it, credit card fees of as much as 6 to 10 cents a gallon at current prices, and franchise fees paid to the national brand, such as Sunoco or ExxonMobil, for permission to put their branding on the gas station.
Most gas station operators net only a few cents per gallon on fuel itself – which is why many gas stations are really convenience stores with pumps out front. Borenstein and some of his collaborators have also documented that retail gas prices rise quickly when wholesale costs climb but fall slowly when wholesale costs drop.
The question of gas tax holidays
The federal government charges a tax on fuel, of 18.4 cents a gallon for gasoline and 24.3 cents a gallon for diesel. States charge their own taxes, ranging from 70.9 cents a gallon for gas in California to 8.95 cents in Alaska.
When gas prices rise, many politicians start talking about temporarily suspending their state’s gas tax. That does reduce prices, but not as much as politicians – or consumers – might hope. Research on past gas tax holidays has found that consumers get about 79% of the reduction in gas taxes. That means oil companies and fuel retailers keep about one-fifth of the tax cut for themselves rather than passing that savings to the public.
Gas tax holidays also reduce funding for what the taxes are designed to pay for, typically roads and bridges. That pushes road and bridge upkeep costs onto future drivers and general taxpayers.
There is an additional problem, too: Taxes on gasoline are supposed to charge drivers for some of the costs their driving imposes on everyone else – carbon emissions, local air pollution, congestion and crashes. But Borenstein has found that U.S. fuel tax levels are already far below the true cost to society. Removing the tax on drivers effectively raises the costs for everyone else.
The Jones Act: A small number that adds up
The 1920 Jones Act is a federal law that requires cargo moving between U.S. ports to travel on vessels built and registered in the U.S., owned by U.S. citizens, and crewed primarily by U.S. citizens and permanent residents. Of the world’s 7,500 oil tankers, only 54 meet this requirement. Only 43 of these can transport refined fuels such as gasoline.
So, despite significant refining capacity on the Gulf Coast, some U.S. gasoline is exported overseas even as the Northeast imports fuel, in part reflecting the relatively high cost of moving fuel between U.S. ports.
Economists Ryan Kellogg and Rich Sweeney estimate that the law raises East Coast gasoline prices by about a penny and a half per gallon on average, costing drivers roughly $770 million a year. In light of the war’s effect on gas prices, the Trump administration has temporarily suspended the Jones Act requirements – an action more commonly taken when hurricanes knock out Gulf Coast refineries and pipeline networks.
What moves the number
The result of all these factors is that the price that drivers see at the pump mostly reflects the global price of crude, plus a stack of domestic costs, only some of which are inefficient.
Tax holidays give a partial, short-lived rebate. Jones Act waivers trim pennies, though permanent repeal may cause more fundamental changes, such as reduced rail and truck transport of all goods, which could lower costs, emissions and infrastructure damage associated with cargo transportation. Harmonizing fuel blends across states and seasons may lower prices somewhat, but likely at the expense of increased emissions.
Ultimately, the best protection against oil price shocks is a more efficient gas-burning vehicle, or one that doesn’t burn gasoline at all. In the meantime, the best I can offer as an economist is clarity about what that $4.30 actually buys.
Robert I. Harris, Assistant Professor of Economics, Georgia Institute of Technology
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Health
5 Babyproofing Tips for Baby Safety Month
Babyproofing is about anticipating those discoveries before little ones make them. In honor of National Baby Safety Month, consider these tips you can use to make your home safer all year round.
5 Babyproofing Tips for Baby Safety Month
(Feature Impact) Outsmarting a baby can be harder than it sounds – especially when it comes to transforming your home into a safe place for them to explore. Through their eyes, a coffee table becomes a climbing opportunity, a dangling phone charger looks like a teething toy and a cabinet of cleaning supplies could be an exciting travel destination.
Babyproofing is about anticipating those discoveries before little ones make them. In honor of National Baby Safety Month, consider these tips to make your home safer all year round.
Install Gates and Doorknob Covers
Crawling babies and stairs are a bad combination. Make sure the two never have the chance to meet by securely installing safety gates at the top and bottom of staircases to thwart young explorers. Gates or doorknob covers can also block access to other rooms and areas you’d prefer to keep off limits, like kitchens, bathrooms and laundry areas.
Use Safety Latches Wisely
Cabinets and drawers can contain a myriad of dangerous items, from cleaning products to sharp objects and medications. Even if you have rooms gated off, treat safety latches and locked storage receptacles as a second line of defense to make sure babies and toddlers can’t rummage where they shouldn’t.
Stress-Test Furniture
As babies and toddlers transition from crawling to walking, they often try using furniture to pull themselves up. Tall or unstable objects like TV stands, small tables and bookshelves can tip over if they aren’t properly secured. Try giving these objects a shake to see whether they’re easily moveable or wobbly; if so, anchor them to the floor or wall when possible. While you’re at it, check for sharp corners at the right height to bonk little heads and cover them with softer edge protectors.
Cover Outlets and Stow Cords
Electrical outlets can be tempting targets for curious fingers. Outfit them with covers or plastic safety caps, especially if you don’t already have tamper-resistant receptacles with built-in mechanisms to block foreign objects from entering the slots. As you’re going about your outlet audit, pay attention to cords as well. When possible, tuck them away or secure them with cord organizing systems, and block access to objects like lamps where cords can be used for tugging and toppling.
See the World at Their Level
Although it might feel silly, one of the best ways to spot hazards around your home is to scout for them from a baby’s perspective. Try getting as close to the floor as you can then look around each room for anything that could interest a young child and pose potential danger. In particular, keep an eye out for small objects that could become choking hazards, like dropped coins, batteries or loose toy pieces.
As children grow, so do the needs of your space. Visit eLivingtoday.com for more ideas on designing your home to fit your family.
Photo courtesy of Unsplash
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Economy
U.S. Consumer Confidence Slips as Americans Grow More Cautious About the Future
U.S. consumer confidence edged lower in August as Americans became more pessimistic about jobs, income and business conditions over the next six months, despite improved views of the current economy.
NEW YORK — U.S. consumer confidence edged lower in August as Americans expressed greater concern about future business conditions, jobs and household income, even as their assessment of the current economy improved.
The Conference Board reported that its Consumer Confidence Index fell 0.8 points to 89.4 in August, down from 90.2 in July.
The relatively small decline, however, masks a widening gap between how consumers view conditions today and what they expect in the months ahead.
The Present Situation Index, which measures consumers’ assessment of current business and labor market conditions, climbed 6.8 points to 121.2, reversing three consecutive months of declines.
Meanwhile, the Expectations Index, which measures the short-term outlook for income, business and employment conditions, dropped 5.8 points to 68.2.
“Consumer confidence moderated slightly in August for a second consecutive month,” Dana M. Peterson, chief economist at The Conference Board, said in the organization’s Aug. 25 release.
Jobs Look Better Today — But Consumers Worry About Tomorrow
Americans’ perceptions of the current labor market improved considerably during August. About 27% said jobs were plentiful, up from 24.4% in July, while 19.5% said jobs were hard to get, down from 21.7%.
The outlook for the next six months was considerably weaker.
Only 14.6% expected more jobs to become available, compared with 16.4% in July. At the same time, 26.1% expected fewer jobs.
Consumers were also less optimistic about their incomes. About 17.6% expected their income to increase, down from 19.5% in July, while 13.8% expected their income to decline.
Prices Remain on Consumers’ Minds
Inflation continues to influence how Americans feel about the economy. According to The Conference Board, consumers’ written responses frequently mentioned prices, oil and gasoline, food and groceries, trade, jobs, and war or conflict.
Average and median expectations for inflation over the next 12 months also increased slightly.
Interest rates remain another concern. More than six in 10 consumers — 61.3% — expected interest rates to rise over the next year, although that was slightly lower than the 62% recorded in July.
Consumers Are Still Planning to Spend
The softer outlook hasn’t eliminated Americans’ willingness to make purchases.
Auto-buying expectations remained strong on a six-month moving-average basis, while homebuying expectations declined slightly in August but remained on a longer-term upward trend after hitting decade lows in early 2024.
Restaurants, bars and takeout; utilities; and streaming, internet and mobile services ranked among consumers’ leading planned service expenses.
Consumers were less enthusiastic about discretionary activities including movies, personal-travel hotels, airfare, amusement parks, museums and historical sites.
Why It Matters
The August numbers paint a mixed picture of the American consumer.
People are seeing some improvement in the economy they are experiencing today, particularly in the labor market. But their expectations for the next six months are becoming noticeably more cautious.
That divide matters because consumer spending represents a major part of U.S. economic activity. If concerns about employment, inflation and household income begin translating into reduced spending, weakening confidence could eventually become more significant for the broader economy.
For now, the August survey suggests Americans haven’t stopped spending — but they’re increasingly keeping an eye on what may be coming next.
The preliminary August Consumer Confidence Survey was conducted online for The Conference Board by Toluna. The survey period was Aug. 3–16, 2026.
Source: The Conference Board, August 2026 Consumer Confidence Survey®, released Aug. 25, 2026.
STM Daily News Economy News Brief
Sources
- The Conference Board — U.S. Consumer Confidence, August 2026 — Primary source for the August Consumer Confidence Index, Present Situation Index and Expectations Index.
- The Conference Board — Consumer Confidence Survey & Data — Consumer confidence survey information, methodology and release schedule.
Related Economic Data
- Bureau of Economic Analysis — Consumer Spending — Official U.S. data tracking personal consumption expenditures. Consumer spending increased 0.2% in July 2026.
- BEA — Personal Income and Outlays, July 2026 — Tracks household income, disposable income, consumer spending and saving.
- Bureau of Labor Statistics — Consumer Price Index — Official inflation data. The July 2026 CPI was up 3.4% from a year earlier; August CPI is scheduled for release September 11.
- Federal Reserve — Consumer Credit — Federal Reserve data covering revolving and nonrevolving consumer credit.
Automotive
Avoiding a Costly Lockout: 4 Reasons to Duplicate Your Car Key
Duplicate Your Car Key: Losing your keys may be frustrating, but realizing you’re locked out of your car – without a spare key – can be truly panic-inducing. Consider these four common reasons drivers make duplicate keys, and how planning ahead can help prevent a lockout from becoming a costly problem.
Avoiding a Costly Lockout: 4 Reasons to Duplicate Your Car Key
(Feature Impact) Losing your keys may be frustrating, but realizing you’re locked out of your car – without a spare key – can be truly panic-inducing. The price of getting back on the road can depend on several factors, including your vehicle make and model, the type of key that needs replacing and whether the situation calls for emergency roadside assistance.
Avoiding a potentially pricey and stressful lockout, which occurs for nearly 4 million Americans each year, starts by planning ahead. According to KeyMe Locksmiths, a service that makes it easy to duplicate car keys at up to 70% off dealership prices, creating a spare before the original is lost, addressing worn keys before they break and keeping backups in secure locations can reduce the need for emergency locksmith services.
“A good rule of thumb is to have at least two working keys for your vehicle,” said Samantha Jahnke, chief experience officer for KeyMe Locksmiths. “If you’re down to one, make a spare while you still have a working key. It can save you stress and expense if you’re ever locked out.”
Consider these four common reasons drivers make duplicate keys, and how planning ahead can help prevent a lockout from becoming a costly problem.
Have a Backup for Lost or Damaged Keys
One car key isn’t enough, because all it takes is one accident or memory lapse to disrupt your day. Maybe you already had a spare key, but it’s been a while since you’ve seen it. Or perhaps you have a habit of locking your key inside your vehicle, so you’d feel better with an extra. Having a spare – or a spare for the spare – gives you peace of mind you have another way to get back on the road without additional hassle.
Give Another Driver Convenient Access
If you share a vehicle with another member of your household, it makes life more convenient for each driver to have their own keys. Instead of passing the primary set back and forth, or arguing over who saw them last, both of you will have reliable access to the car when you need it. Plus, a spare set of keys makes a nice surprise when it’s time to give a new driver in the house access to the car.
Keep a Spare Set for Travel
When you’re far from home, it can be especially risky to only have one set of keys with you. If they happen to fall out of your pocket or get misplaced at the hotel, you could wind up stranded hundreds of miles away, facing the stress of finding a replacement service in an unfamiliar area. Bring a spare to keep in a secure location, like a purse or backpack that always stays on you, so you can focus on enjoying your vacation. If you realize before a trip you don’t have a spare, plan ahead and get a duplicate made before you hit the road.
Make an Extra for a Used Vehicle
Sometimes buying a used vehicle means the previous owner has already done the work of losing the spare key. If your car only comes with one key, make a backup as soon as possible. Having two working keys can also pay off when it’s time to sell or trade in your vehicle, as a missing spare may reduce its value or give a buyer another reason to negotiate.
Learn more about duplicating keys for more than 40,000 different vehicle makes, models and years at CopyKeys.com.
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