Philadelphia's high gas prices strain budgets
Philadelphia drivers welcomed a slight relief at the gas pumps this week, with average prices falling by several cents.
- But the surging costs remain a hit to many people's wallets.
Driving the news: The average price for regular gas in Philadelphia on Thursday was $4.37, 12 cents lower than a week before, according to AAA.
- Although it seems gas prices may have peaked, current prices are still $1.32 more than this time last year.
Catch up fast: Inflation has reached a 40-year high over the past year, and energy prices were already a significant part of that. But the early days of Russia's invasion of Ukraine sent crude oil prices soaring, and in turn, gas prices shot up nationwide.
- Oil prices dropped nearly 30% last week, but it's taking a longer time for consumer prices to follow suit.
What they're saying: Most economists agree inflation is highly regressive, falling hardest on low-income people.
- Susan Wachter, a real estate and finance professor at the University of Pennsylvania, told Axios it's not uncommon for people to choose longer commutes to find cheaper housing outside of the city.
- "They move to avoid higher housing costs to farther out communities, but in doing so, they extended their commuting time. But now they're exposed to higher costs of transportation through higher prices at the gas station," she said.
Between the lines: People with low incomes appear to be relying more on credit cards rather than debit cards when purchasing gas, a possible sign of financial stress, Reuters reports.
- Gas makes up a large portion of total spending for lower income consumers, many of whom are employed in sectors with less options for remote work, according to a Bank of America analytics report.
What to watch: Time will tell whether the gas price surge will lead to more people opting for public transit or more fuel-efficient cars in the long term.
- SEPTA has used the soaring costs as an advertisement opportunity, offering discounts for 25% off on weekly passes through March.
More Philadelphia stories
No stories could be found
Get a free daily digest of the most important news in your backyard with Axios Philadelphia.