LINCOLN, Neb. (KOLN) – After a surge in gas prices caused by the U.S.-Israel war with Iran, an economics professor with the University of Nebraska-Omaha said it’s costing Nebraskans as much as an extra $150 to their monthly expenses.
10/11 spoke with Dr. Jane Liu on Thursday who said overall, gas prices have risen more than 40% compared to the start of this year.
While a tentative agreement to continue the ceasefire in Iran has brought U.S. gas prices down, with the national average falling about 19.5 cents over the last week, that relief may be short-lived depending how long the ceasefire lasts and whether the Strait of Hormuz is reopened.
In Nebraska, AAA reports a current average of just over $4 a gallon, with many stations around Lincoln seen at around $3.99.
Liu said the increase at the pump since the end of February is costing the average American household between $100 to $150 more a month as compared to before the price surge at the start of the war. She specified that Nebraska households, which typically drive more miles and favor trucks and SUVS over fuel efficient vehicles, are more likely to be on the higher end of that range at around $150.
Liu came up with those numbers using the average number of vehicles per household (1.8) and the average number of miles driven a month per vehicle (1,350 miles at 20 miles per gallon) to calculate an average fuel consumption per month of 122 gallons. She then factored in the price increase of about $1.25 since the war started.
And that’s not to mention the rise in the price of goods and services reliant on shipping costs.
“It has real impact on people’s lives,” Liu said. “Especially in Nebraska, a big agriculture economy, and from fertilizer to transportation to the gas price, have a real impact on farmers and people in Nebraska.”
With nothing yet settled in Iran, Liu said it’s hard to say whether the current drop in prices will continue or not, especially as consumer demand increases going into summer.
She adds that dipping into U.S. reserves could help keep prices down, but doesn’t solve the problem when so much of the world’s oil supply comes from the middle east.
“We’re already seeing a decrease in the energy reserve,” Liu said. “That can help the supply temporarily, but it’s not a long-term solution.”
The increase in prices has also drawn attention to renewable energy like solar, wind and hydroelectric, as well as electric vehicles. But Liu said planning to implement those energy sources long-term and manufacturing products doesn’t happen overnight.
“The oil price happens very fast and the conflicts in Iran develop very fast, but for businesses, for households to make plans, to change for their habits, it takes a very long time,” Liu said.
For now, experts say this might be the best time to fill up your tank before the downward trend dries up.
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