Gasoline prices take the biggest bite out of pretax income in 30 years

Yesterday, the Energy Information Administration (EIA) reported that the U.S. households in 2012 spent an average of $2,912 on gasoline, or just under 4 percent of their pretax income, the highest percentage in 30 years.  In 2008, the average household spent a similar amount.  

What is more interesting, is, that overall consumption has decreased in recent years.  This is due to efficiency gains accelerating over the past several years.  The EIA said that the total U.S. gasoline consumption fell in 2010 to 134.2 billion gallons, its lowest since 2001.  Obviously, prices have increased faster than the efficiency gains.  At the same time, EIA’s average city retail gasoline price rose 26.1% in 2011, and another 3.3% in 2012.  The 26.1% yearly increase in 2011 was 6 times greater than the 3.4% rise in nominal household income.  The 3.3% estimated gasoline price increase in 2012 exceeded the 2.9% estimated increase in income. 

So my question is, if we can’t raise income to offset gasoline cost increases, then why is there such a large push back on hydro-fracking of oil and gas wells, which accomplishes the following:

1. An increase in oil production;
2. A decrease in oil importation – less outflow of dollars and deficit reduction;
3. Providing high paying jobs - an increase tax revenues for the states and the U.S. Government; and
4. Moving the country towards less energy dependence.

Aren’t these good things?

Source: www.eia.gov/consumption/