Why Pennsylvania’s low-income residents are feeling the squeeze as gas prices rise
- Written by Hannah Wiseman, Professor of Law, Penn State
When gas prices rise, not everyone feels the pain equally. For low-income and rural Pennsylvanians, a trip to the gas station can mean choosing between a full tank and groceries[1]. Many factors, such as crude oil costs[2], distribution and marketing[3], and to some extent Pennsylvania gas taxes[4] all add up to keep Pennsylvania’s gas prices[5] higher than average.
Pittsburgh gas prices are among the highest in Pennsylvania due to higher urban demand[6], refinery maintenance issues in the Midwest[7] and supply shortages.
Currently, the average gas price in the U.S. is $4.50. In Pennsylvania[8], the average is $4.66, and in Pittsburgh[9] it’s $4.91.
To understand why, and what – if anything – can be done about high gas prices[10], The Conversation U.S. spoke with Hannah Wiseman[11], an energy and environmental law scholar whose work focuses on how regulation is designed. She explains who gets hit hardest by high gas prices and why relief is so hard to come by.
How do rising gas prices hit low-income Pennsylvanians differently than middle- or upper-income residents?
Low-income people typically have a limited monthly budget, with fewer or no savings to draw from. Each essential expense is a portion of an individual’s or family’s fixed budget, and when an essential expense rises, it eats up more of this fixed budget. For the costs of fuel and electricity, this is called the “energy burden[12]” – the percentage of someone’s income that goes to energy costs. The higher the cost of energy, the more this impacts people’s ability to pay for other essential goods, such as food, medicine and medical care.
Pennsylvania consistently ranks among states with the highest gas prices. What regional conditions make Pennsylvania expensive?
Like any other good, the cost of gas is influenced by the cost of the raw product from which gasoline is refined, crude oil, the costs of operating the facilities that transport and distribute gas, and the amount of retail competition.
As the U.S. Energy Information Administration explains, distance from supply[13] – refineries, ports and pipelines – usually means higher prices. This type of infrastructure is scarcer in the mid-Atlantic region, including Pennsylvania. And some rural areas have fewer gas stations[14], which can result in less retail competition.
Gasoline prices tend to be lowest in Gulf Coast states[15], such as Texas, with a current average of $4.01, and Louisiana, with a current average of $3.99, where there are many crude oil refineries and oil pipelines.
How does the lack of reliable public transit in rural areas deepen the inequality issue?
Rural areas tend to have less public transportation[17] – making personal vehicles essential – and people have to drive to their jobs to make ends meet. So when gas prices go up, rural residents often have no option but to fill up their tank at a high cost and potentially forgo other essentials.
Rural populations also have a substantial percentage of individuals defined as the “working poor[18].” These are low-income individuals for whom getting to work is essential. They are already saddled with high energy burdens, which rise with higher gas prices, and they live in rural areas with few affordable options for getting to work.
Are there existing state or federal programs that help low-income residents offset fuel costs?
Low-income support tends to come from states. Most government programs support home heating costs and utility bill[19] payments for low-income residents; programs are more limited for gasoline. In California during the 2022 spike in gasoline prices the state sent checks[20] to low-income families. Currently, Pennsylvania has no formal legislation in place to assist low-income families with gasoline costs.
Electric vehicles remain out of reach for many low-income families. Does the green energy transition risk widening the equity gap?
Many U.S. residents[22] cannot buy electric vehicles, largely because of tariffs on the import[23] of affordable electric vehicles from countries such as China.
Additionally, the H.R. 1 Act[24] erased the $7,500 tax credit[25] for buying electric vehicles. This limited access to EVs widens the gap – wealthier families with electric vehicles can plug in their vehicles and avoid high gas prices, while lower-income individuals lack this option.
What can be done about high gas prices for low-income Pennsylvanians?
Pausing gasoline taxes[26], which is currently being debated by Pennsylvania state legislators[27], can reduce prices, but it also lowers revenues[28] needed for public programs.
Direct rebates from the state to low-income individuals[29] offer more value. However, Pennsylvania lawmakers are not presently considering direct rebates.
Read more of our stories about Pittsburgh and Pennsylvania[30].
References
- ^ choosing between a full tank and groceries (www.wkbn.com)
- ^ crude oil costs (tradingeconomics.com)
- ^ distribution and marketing (theconversation.com)
- ^ Pennsylvania gas taxes (www.pa.gov)
- ^ Pennsylvania’s gas prices (gasprices.aaa.com)
- ^ higher urban demand (www.pittsburghmagazine.com)
- ^ refinery maintenance issues in the Midwest (www.post-gazette.com)
- ^ In Pennsylvania (gasprices.aaa.com)
- ^ in Pittsburgh (gasprices.aaa.com)
- ^ high gas prices (theconversation.com)
- ^ Hannah Wiseman (dickinsonlaw.psu.edu)
- ^ energy burden (www.aceee.org)
- ^ distance from supply (www.eia.gov)
- ^ have fewer gas stations (www.eia.gov)
- ^ lowest in Gulf Coast states (www.eia.gov)
- ^ aimintang/E+ collection via Getty (www.gettyimages.com)
- ^ less public transportation (enotrans.org)
- ^ working poor (ers.usda.gov)
- ^ home heating costs and utility bill (www.puc.beta.pa.gov)
- ^ the state sent checks (www.rff.org)
- ^ UCG/Universal Images Group via Getty Images (www.gettyimages.com)
- ^ Many U.S. residents (ampo.org)
- ^ tariffs on the import (www.npr.org)
- ^ H.R. 1 Act (www.congress.gov)
- ^ $7,500 tax credit (www.hrblock.com)
- ^ Pausing gasoline taxes (www.rff.org)
- ^ Pennsylvania state legislators (www.cbsnews.com)
- ^ lowers revenues (www.pa.gov)
- ^ Direct rebates from the state to low-income individuals (www.rff.org)
- ^ Pittsburgh and Pennsylvania (theconversation.com)
