Gasoline prices have moved a little up from their February low, as oil has bounced off the same bottom. Pump prices are still the lowest in decades on an inflation adjusted basis. It is funny to hear people actually complaining about the past week's increase. Here in Portland, it is about $1.90.
Weekly U.S. Regular Conventional Retail Gasoline Prices (Dollars per Gallon)
Gas prices today are way too low, I think. And in general they are way too volatile.
Road and bridge infrastructure in this country is in pretty major need of repair, and the federal highway fund (from federal gas tax) is low and falling (at the current rate, will be empty in a few years). State and local road and bridge infrastructure faces the same problem. Taxes on gas are not indexed to inflation or to increased miles driven at higher mpg. So the funds available for roads and bridges are falling badly short.
Gas taxes should be increased and indexed to inflation. There could be a formula for a temporary freeze on the tax increase and/or a temporary decrease, when oil prices rise dramatically. Ideally when oil prices plunge, gas prices would go down more slowly, and extra tax funds would go into the highway fund. When oil prices soar, gas prices would go up more slowly, and the extra funds from prior years would be used to cover the shortfall.
Gas prices wouldn't be so volatile for the consumer. Gas prices going up too fast is tough on people, for obvious reasons. Gas prices going down too fast is also tough on people, for less obvious reasons - but all those people buying $50K pickup trucks and SUVs today because gas is cheap will feel it when gas isn't cheap any more.
And there would be enough funds to maintain and replace our roads and bridges. For example, when gas (national average pump price) was $4.00, the federal tax was $0.18. Today, gas is $1.80 and the tax is $0.18 and the highway fund is falling $3BN/yr and, even with contributions from general fund money, is headed for insolvency in the near term. But gas could be $2.30, the tax could be $0.58, and the highway fund could be saving up a big surplus for future years. Would most people's lives really be worse off if pump gas today was $2.30 instead of $1.80?. Is your life today so much better than it was in September 2015, when pump gas was $2.30?.