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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Consumer Corner
Getting Your Wood-Burning Fireplace Ready for Winter
As cold temperatures creep in, you might be dreaming about cozy fall and winter evenings in front of a glowing, crackling fireplace. Before you (literally) fire it up for the first time, consider these steps to make sure your wood-burning fireplace is ready to heat your home cleanly, safely and efficiently.
Getting Your Wood-Burning Fireplace Ready for Winter
(Feature Impact) As cold temperatures creep in, you might be dreaming about cozy fall and winter evenings in front of a glowing, crackling fireplace. Before you (literally) fire it up for the first time, consider these steps to make sure your wood-burning fireplace is ready to heat your home cleanly, safely and efficiently.
Clear Out Old Ash and Debris
When you haven’t used your fireplace for a while, it can build up dust, soot and debris. As the first step of your annual checkup, clean out last season’s leftovers but leave about a 1-inch layer of ash at the bottom of the firebox to provide insulation and make it easier to get wood burning.
Schedule Professional Maintenance
Chimney sweeps still exist, although they don’t look like the soot-smudged lads from old movies anymore – and these days they come with a collection of high-powered modern tools to remove buildup from chimneys and flue systems. Experts can also look for ventilation issues, cracks in the masonry and other potential hazards. The National Fire Protection Association recommends getting your chimney inspected once a year and cleaned or maintained as needed.
Consider Efficiency Upgrades
To keep your fireplace working better for longer or improve its energy efficiency, explore your options for upgrades suited to your fireplace type. Glass fireplace doors, new dampers or a high-efficiency fireplace insert can all help reduce energy loss and improve heating performance. Adding or replacing a chimney cap and applying waterproof sealant to the bricks every five years can help protect your chimney from moisture damage over time.
Burn the Right Kind of Wood
Not all wood burns alike, so you can improve the warmth and efficiency of your fires simply by choosing the right kinds of logs. Stock up on seasoned hardwood dried for 6-12 months and store it in a dry, well-ventilated area away from your home so it doesn’t attract pests like mice who may want to take up residence. Avoid burning painted or treated lumber, wet wood or household trash, which can produce excess smoke and harmful pollutants.
Use Safe Fireplace Equipment
Beyond the fireplace itself, check your setup and tools to make sure you have everything you need to safely start and maintain your fires. If you have an open fireplace, make sure to use a sturdy fireplace screen to contain any stray sparks. A good-quality poker, tongs, shovel and brush can also help you control logs and embers, manage ash and keep your fireplace clean throughout the season.
Discover more home maintenance and upgrade ideas at eLivingtoday.com.
Photo courtesy of Unsplash
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Automotive
Slate Truck Gets Real: First Experience Center Opens Ahead of Planned Deliveries
Slate Auto’s first permanent Experience Center gives consumers an up-close look at its customizable electric truck ahead of planned customer deliveries.
Slate Auto’s new Chicago location gives prospective buyers a permanent place to see the minimalist electric pickup, explore customization options and learn about demo opportunities—but it is not yet proof that customer deliveries have begun.
CHICAGO — October 20, 2026 — The Slate Truck is moving out of computer renderings and temporary roadshow stops and into a permanent retail setting. Slate Auto opened its first Experience Center on October 15 at 1053 W. Grand Avenue in Chicago, giving consumers a year-round location to get an up-close look at the company’s highly anticipated electric pickup.
The Near West Side facility occupies a former Tesla location and includes showroom, retail and garage space, along with electric-vehicle charging infrastructure. For Slate, the opening represents an important step in turning strong online interest into a more tangible buying experience as the startup works toward launching its first vehicle.
Visitors can examine the truck’s compact dimensions, deliberately simple cabin and accessory-driven design in person. The center also showcases Slate’s personalization strategy, including exterior wraps, add-on accessories and digital design tools intended to let owners configure the truck around their needs.
Slate has also promoted demonstration opportunities connected with the location, although availability may be limited or appointment-based as the company continues to prepare its fleet. Early media access included passenger rides rather than unrestricted customer test drives, so prospective visitors should confirm current availability before making a special trip.
Why the Chicago opening matters
Until now, most consumers have encountered the Slate Truck through online reservations, media coverage or temporary appearances. A permanent showroom gives buyers a chance to judge details that are difficult to evaluate on a screen, including seating position, bed access, cabin materials and the overall size of the vehicle.
That is especially important for a product built around an unconventional value proposition. Slate is promoting a basic two-seat, two-door electric truck with manual crank windows and no factory-installed infotainment screen or stereo. The company’s strategy is to keep the starting price low and let buyers add features later through accessories and conversion kits.
The physical location also gives Slate a place to explain that approach directly. Rather than presenting the truck as an unfinished vehicle, the company can demonstrate how its modular accessories, wraps and planned SUV-style conversion components are meant to expand the vehicle’s usefulness over time.
Chicago is a logical first market for that effort. The city offers access to a large Midwestern customer base and is within the broader region of Slate’s planned manufacturing operation in Warsaw, Indiana. Reusing a former Tesla store also gives the startup a space already suited to displaying and servicing electric vehicles.
The roadshow continues beyond Chicago
The Experience Center is opening as Slate expands its public demonstration schedule. The company’s events calendar lists a Boston-area demo ride event from October 21 through October 25 at The Shops at Chestnut Hill, followed by an appearance at RADwood in Alameda, California, on October 24 and a New Jersey demo ride event in Freehold from October 28 through October 31.
Slate also lists future stops in Washington, D.C., Raleigh, Atlanta, Miami and Orlando. Together, the permanent Chicago center and the traveling events suggest the company is moving into a broader customer-education phase ahead of planned deliveries.
What has—and has not—changed
The showroom opening does not change Slate’s headline pricing or range claims. The truck is still advertised with a base price of $24,950 before taxes, registration and destination charges. With the currently listed $1,450 destination fee, the entry price would be approximately $26,400 before other costs or optional equipment.
Slate also continues to advertise an estimated range of up to 205 miles. That figure remains an estimate rather than a final EPA-certified rating.
Most importantly, Slate has not publicly confirmed that regular customer production has started or that the first retail deliveries have occurred. Limited deliveries have been reported as possible before the end of December 2026, while many reservation holders may receive later delivery windows in 2027. The Chicago opening is therefore a commercialization milestone, not a manufacturing milestone.
For customers and industry observers, the next major signals will be the start of production at the Warsaw factory, final specifications and EPA range ratings, and confirmed handoffs to paying buyers.
The bottom line
Slate Auto now has a permanent place where consumers can see and evaluate its unusually simple electric truck. That makes the product feel more real and gives the company a platform to explain a customization-heavy business model that may be unfamiliar to traditional truck buyers.
Still, the biggest questions remain unanswered. Opening a showroom demonstrates progress in marketing and customer engagement; producing vehicles at scale, holding the promised price and delivering a 205-mile truck to reservation holders will determine whether Slate can convert enthusiasm into a viable automotive business.
Sources and more information
- Slate Auto events and demo schedule
- Electrek: Slate opens its first Experience Center in Chicago
- Autoblog: Slate opens its first U.S. showroom
- Slate Auto
Category: Consumer Corner / Automotive
Automotive
The New Tire-Buying Playbook: AI Insights Meet Human Advice
New Tire-Buying Playbook: A tire purchase can start with a familiar moment: a dashboard warning light, a repair shop visit, worn tread or realizing the current set is nearing a mileage milestone. When it’s time to replace tires, drivers have more ways than ever to research options, including classic search engines and AI chatbots.
The New Tire-Buying Playbook: AI Insights Meet Human Advice
(Feature Impact) A tire purchase can start with a familiar moment: a dashboard warning light, a repair shop visit, worn tread or realizing the current set is nearing a mileage milestone. When it’s time to replace tires, drivers have more ways than ever to research options.
New research from Hankook Tire’s Gauge Index Survey found drivers are utilizing multiple methods for research, from search engines and AI assistants to asking someone they trust for advice. Two-thirds of respondents said they always or often research multiple sources before buying tires, suggesting many shoppers want to weigh several opinions before deciding to buy a new set, including turning to fellow drivers.
As tools like classic search engines and AI chatbots continue to evolve, the most useful strategy for tire shopping may be less about choosing between technology and human expertise, and more about knowing how each fits into the research process. Here are a few ways drivers can confidently conduct tire research.
Start broad then narrow the search.
For many drivers, the process begins online. One-quarter of respondents said they typically begin their tire research with a search engine, the most common starting point reported in the survey. Retailer or dealer websites are the next at 16%, followed by recommendations from a mechanic at 15%.
That range of starting points reflects how personal a tire purchase can be. A search engine can help a driver organize initial questions and identify the types of information they want to compare. Retailer and dealer sites offer another place to review available options – and reviews from other drivers. A mechanic can help put the vehicle and driver’s specific needs into context.
Drivers can also use their initial search to create a short list of requirements, such as tire size, type and available warranties.
Use AI as one research tool – but not the only one.
AI is a growing part of any research. About 4 in 10 drivers (42%) said they have used an AI tool to research or compare tires more than once. Another 11% said they have not used one yet but plan to the next time they buy tires.
Conversely, just 5% of respondents said an AI assistant or chatbot would be their typical first stop when researching tires, suggesting many drivers may add AI later in the process to help sort through information or frame comparisons.
AI can help turn a general concern into a clearer list of questions. A driver might use it to identify terms to research, compare categories of information or prepare for a conversation with a retailer, dealer or repair professional.
Keep trusted people in the research loop.
Despite drivers’ increased reliance on digital tools, trusted advice is still important. More than one-quarter of drivers said they would typically begin tire research with a recommendation from a mechanic (15%) or from friends or family (12%).
Friends and family may share firsthand experiences, while a mechanic may help a driver better understand the questions that matter for their vehicle. More than 1 in 5 respondents (21%) list advice from a repair shop among the top three reasons that would prompt them to buy new tires, showing the role professional guidance can play when a purchase becomes necessary.
Find the full survey and approach your next tire research process with clearer questions, more confidence and a better sense of what matters most for the road ahead at HankookTire.com.
Photo courtesy of Shutterstock
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