Yinz Seen These Gas Prices?

You can almost hear it before you finish your coffee. Yinz seen these gas prices? Friend at the coffee shop. Guy in the next aisle at Giant Eagle. Sister-in-law on Sunday. The sign at the corner station is the most-read piece of advertising in America, and right now it is screaming.

It is not paranoia. Gas is high. The national average is hovering around $4.50 a gallon, and West Coast drivers are staring down $6 and $7 fills. The Strait of Hormuz has been functionally shut for months because of the conflict with Iran. California, which imports roughly 75% of its crude oil from overseas, just took delivery of its last tanker from the Middle East. Even if Hormuz reopens tomorrow, a new tanker still takes months to reach the West Coast. We saw the same lesson during COVID. When you shut a supply chain down, restarting it is not a switch you flip.

The Honda Fit and the Six-Dollar Weekend

If you are anything like most people, you are probably thinking, who cares about national averages, these prices are sky high in MY life. I get it. So did a young employee of mine in 2022, when gas prices spiked after Russia invaded Ukraine.

He was fresh out of college, not making big money yet, and he walked into my office one afternoon and told me he was not going to Deep Creek that weekend.

You have to understand the context. This kid loved Deep Creek. His uncle had a place down there, and every weekend that he could, he would drive down to drink beer, eat pizza, play poker, and just be with family. He talked about Deep Creek the way some people talk about church. Family was a huge deal to him.

And there he was, telling me he could not go this weekend. Because of the gas.

I happen to know that drive well. I am at Deep Creek seventy to ninety days a year, often pulling a boat, so I pay close attention to the mileage on the longer but faster route. From my house in Pittsburgh, it is just over 80 miles each way. Round it up to 100 each direction, call it 200 miles round trip. I am giving him an extra 40 miles for free to make the math easy.

I also happened to know exactly what he drove, because he would not shut up about how great it was on gas. A Honda Fit. 35 miles per gallon.

So let us do the math the way we should have done it together. 200 miles divided by 35 miles per gallon equals about 5.71 gallons. Round it up to six. The spike at the pump had added roughly a dollar per gallon over what we had been paying a few months earlier. Six gallons times a buck extra is six dollars.

Six dollars. That was the entire incremental cost of the price spike for his Deep Creek weekend.

I asked him a question. If you drove down this weekend and your uncle said hey, the beer and the pizza are not free anymore, you have to chip in six bucks, would you still go?

He laughed and said of course I would. I would pay six dollars without even thinking about it.

Then why are you not going now? It is the same six dollars.

The look on his face was the whole point. He was not reacting to the math. He was reacting to the sign at the gas station.

Why We Are All Wired to React This Way

Richard Thaler won the Nobel Prize in 2017 for showing how this kind of mistake happens to all of us, not just twenty-three-year-olds with Honda Fits. Across his work in *Nudge* and *Misbehaving*, he kept coming back to gasoline as one of the great case studies in human financial psychology.

Why gas? Because gas is one of the only prices in America that is advertised on the side of the road in foot-tall numbers, twenty-four hours a day. You drive past it on the way to work, on the way home, on the way to your kid’s game. You know what gas costs right now better than you know what your own grocery bill is. Almost no other consumer good gets that kind of mental real estate.

And what does that constant exposure produce? Overreaction. Thaler showed that when gas prices spike, people will drive miles out of their way to save a few cents per gallon, never doing the math to realize they are burning more gas getting there than they would save at the pump. They will rearrange their lives around the number on the sign.

Most expensively, they will go out and buy a hybrid.

Hybrids are not bad cars. But the math on a hybrid only works if you keep it long enough and drive it far enough to recover the extra purchase cost through fuel savings. When gas is at $4.50, that math looks great. When gas is back at $3.00, it looks a lot less great. The hybrid surge during the 2008 gas spike turned into a long tail of buyers who never recouped their purchase premium because prices reverted before the savings caught up. Thaler’s research showed those buyers were not running the calculation. They were reacting emotionally to the price they saw every morning and locking themselves into a higher upfront cost they would never get back.

The point is not that gas prices do not matter. They do. The point is that we react to gas prices in ways the math does not actually support, because gas is the price we cannot stop staring at.

What the Numbers Actually Say

Let’s look at what gas prices have actually done over time, because the picture is more complicated than the sign at the corner suggests.

The nominal numbers on the pump are misleading on their own. Comparing a 1974 price to a 2026 price without adjusting for inflation is nonsense, because a dollar today buys a fraction of what a dollar in 1974 bought. The honest comparison is the inflation-adjusted price, in today’s dollars.

Here is where every major modern gas spike sits when you convert it to today’s dollars:

– The 2008 peak: roughly $4.89 a gallon

– The 2011 to 2012 peak: roughly $5.05 a gallon, the highest annual average since 1918

– The 2022 peak after the war in Ukraine began: roughly $5.46 a gallon

The 1973 to 1974 oil embargo, the gas crisis so severe it drove a sitting president to wear an inflation-fighting button on national television, averaged about 53 cents a gallon nominally. Adjusted into today’s dollars, that works out to roughly $3.40 a gallon. The crisis that gave us odd-even license plate gas lines was actually slightly cheaper than what you are paying today, in real purchasing-power terms.

The long-run inflation-adjusted average for gasoline going back to 1918 is roughly $3.61 a gallon in today’s dollars. That number is your benchmark. Anything above it is historically expensive. Anything below it is historically cheap.

Where does today fit? Today’s $4.50 is above the long-run average, which means yes, gas is genuinely expensive in real terms right now. It is also below every major spike of the past twenty years. The COVID-era lows when gas dipped under $2 a gallon were a historical anomaly, not a baseline we should expect to see again. And we are doing better than the 1974 driver in real terms, even with our prices climbing.

There is one more piece of context most people are missing. From 2023 through 2025, gas prices actually fell three years in a row in nominal terms. Adjusted for inflation, gas spent those years running below its long-run average. Meanwhile, almost everything else in the consumer basket, groceries, housing, insurance, services, was inflating at rates we had not seen in forty years. Gas was quietly the bargain. Our brains got used to that. Now that gas is climbing again, we are treating it as if the bargain was the baseline. It was not. The cheap years were the gift. This is closer to the average.

Nothing New Under the Sun

Here is one of my favorite ways to make this point with clients and friends.

Back in 2011, when the Arab Spring and the civil war in Libya sent oil prices soaring and everyone in this country was again wringing their hands about the price at the pump, my friend Andy Mankey showed me a TIME magazine cover. He covered up the date and asked me who was on it and what year it was from.

I had no idea. Honestly, nobody he showed it to had any idea either.

It was Gerald Ford, on the cover of TIME magazine, October 14, 1974. The whole issue was about his plan to fight inflation, recession, and the oil crisis that was strangling the country. Ford was about to roll out his Whip Inflation Now campaign, the WIN buttons, the public pleas to plant gardens and turn down the thermostat. People were waiting in lines at the gas station to fill up, and many states had odd-even license plate rules where you could only buy gas on certain days based on your tag number.

I have carried that image around with me ever since. I have used the same cover over and over with clients during every gas spike since 2011, because every single time, the headlines insist that this one is different. And every single time, the truth is what Solomon wrote three thousand years ago.

*There is nothing new under the sun.*

Every crisis is different in its details. The Arab Spring was not the Iran war was not the Russia invasion was not the 1973 oil embargo. But underneath the surface, the same patterns keep repeating. Prices spike. People panic. Politicians scramble. Pundits warn this is the new normal. And then, eventually, prices revert, supply chains heal, and the families who kept their long-term plan intact come out the other side fine. The ones who made permanent decisions in the panic come out the other side poorer.

At least now we can pull up to a pump anytime we want. We are not waiting in lines based on whether our license plate ends in an odd or even number. Compared to the 1974 driver staring at that TIME magazine cover, we are doing pretty well.

Where Gas Prices Actually Bite

I want to be clear. I am not saying gas prices are a non-issue. They eat into our wallets more than most people realize, just not in the way most people think.

J.P. Morgan’s Guide to the Markets has a chart I show clients all the time. It lists every bear market in modern U.S. history and the cause of each one. Four causes show up over and over: recession, Federal Reserve tightening, extreme valuations, and commodity spikes. Energy price spikes have historically been one of the most reliable triggers of bear markets in the United States. They were behind the 1973 to 1974 collapse that helped make 1974 the brutal year Ford was trying to fix on that TIME cover. They were a factor in 1990 around the Gulf War. They were a factor in 2022 around Russia and Ukraine. They are part of what is rattling markets right now.

The reason is simple. When gas goes up, everything goes up. The tractor trailers that bring food to Giant Eagle. The trains and the barges that move goods through the Ohio and Mississippi. The planes you fly on for work. The diesel that runs the farm equipment. The plastic feedstock in the products on your shelves. Every penny at the pump pulls about a billion dollars a year out of American consumer spending and pushes it into energy. That money has to come from somewhere, and it usually comes from the things people would otherwise have bought, which is how energy spikes drag the rest of the economy down with them.

This is also why energy independence does not solve the problem the way people sometimes think it should. The United States is technically a net exporter of energy. But oil is a global commodity. If a buyer in Asia is willing to pay more than a buyer in Pittsburgh, the barrel goes to Asia. California is the cleanest example. The state imports roughly 75% of its crude from outside its borders, and historically around 30% of its foreign crude has come from the Persian Gulf. With Hormuz shut, that supply has stopped. Even if it reopens immediately, the tanker voyage and the refining cycle mean Californians will feel the disruption for months after the news cycle has moved on.

So gas prices matter, but they matter at the level of the macroeconomy and your portfolio. They matter in the second-order effects on everything else you buy and on the markets you are invested in. They usually do not matter at the level of whether you should skip the family weekend at Deep Creek.

What to Actually Do About It

Here is what I told my employee, and what I am telling clients now.

When the cost of living goes up across the board, you are going to have to cut something. That is just math. The question is what you cut.

The easy answer, the one your brain offers first because it is reacting to the sign at the corner station, is to cut the drive. Skip the trip. Stay home. The problem is that the drive might be the meeting that gets you the promotion. The drive might be the last weekend at your uncle’s lake house before your uncle is gone. The drive might be the visit to the grandparents that your kids will remember for the rest of their lives. The thing your brain wants to cut because gas got expensive may have nothing to do with the actual financial damage gas is doing to you and everything to do with the fact that gas is the only price you can see every day.

I would rather you cut something else. The streaming service nobody uses. The subscription that auto-renews. The third meal out this week. The Amazon impulse buys. Pick something whose price is not blinking at you from a roadside sign, because that is exactly where your brain is most likely to make a bad trade.

And before you trade in your car for a hybrid or pull the trigger on an electric vehicle because gas is high, run the actual numbers. What is the purchase premium? How long will you own it? What if electric rates go up while gas comes down? What if gas reverts the way it almost always eventually does? The same Thaler research that showed people overbought hybrids in 2008 will play out again in this cycle. People will look back in three years and realize they made a permanent decision in response to a temporary problem.

We have been here before. 1974 looked unsurvivable. 2008 looked unsurvivable. 2011 looked unsurvivable. 2022 looked unsurvivable. And here we are in 2026 with another version of the same headline. Every time, the news insists this one is different. Every time, eventually, it is not. Prices revert. Supply chains recover. People who panicked and locked in big decisions during the spike are the ones who end up paying for that spike for years after it is over.

The Quiet Truth

The things that matter most in your financial life are almost never the numbers advertised on the side of the road. It is the plan you have, and whether you are following it. It is the savings rate you maintain over decades. It is the consistency with which you give. It is the cost of the relationships you let lapse because you were too busy reacting to the news cycle.

Gas prices are not nothing. They are also not the emergency the sign at the corner makes them feel like.

Run the math on the actual trip. Decide what you can cut that does not blink at you from the side of the road. And get to Deep Creek if Deep Creek is where the people you love are.

Let Us Build the Plan With You

I have watched people in every cycle make emotional decisions in response to high gas prices. The hybrid they did not need. The trip they did not take. The plan they tore up. Before you make one of those decisions, let us help you make an informed one instead.

That is what Beratung Advisors is here for. Bring us the question, the worry, the decision you are weighing. We will run the math with you and build a plan anchored to your core values and priorities, not the sign at the gas station.

Generational planning is the long game. Weeks like this are where it actually gets played.

Let’s build it together.

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How the Numbers Were Calculated

The inflation-adjusted prices in this piece were converted into February 2026 dollars using headline Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics. The formula:

> Historical price × (CPI today ÷ CPI in the historical year) = Real price in today’s dollars

For example, the 1974 nominal average gas price of about $0.53 per gallon, run through that formula using the CPI change between 1974 and February 2026, works out to roughly $3.40 to $3.46 per gallon in today’s money. The 2011 annual nominal average of $3.53 per gallon comes out to roughly $5.05 per gallon today. The 2022 nominal peak of about $5.06 per gallon (June 2022) sits around $5.46 in today’s dollars.

For the recent gas-versus-everything-else gap, the comparison is straight from the BLS price indexes. U.S. retail gasoline prices fell roughly 5.1% in 2024 and another 5.7% in 2025, while headline CPI rose about 2.95% in 2024 and 2.71% in 2025. That gap is the difference between the BLS gasoline price index and the BLS all-items CPI for those years.

The long-run inflation-adjusted U.S. gasoline average since 1918 is approximately $3.61 per gallon in February 2026 dollars, per the historical series published by InflationData.com using BLS data.

Anyone who wants to verify any of this can pull the underlying gasoline price series and the all-items CPI series directly from data.bls.gov.

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Sources

– Current U.S. gasoline prices (late April 2026) and Strait of Hormuz / Iran war context: JPMorgan global commodities strategy commentary as reported by TheStreet (May 2026); J.P. Morgan Private Bank, “When oil jumps, household wealth guides demand” (March 2026).

– Three consecutive years of falling U.S. retail gasoline prices (2023, 2024, 2025): U.S. Energy Information Administration, “In 2025, U.S. retail gasoline prices decreased for third consecutive year”; EIA, “In 2024, U.S. retail gasoline prices averaged about 20 cents less than in 2023.”

– Annual gas price changes vs. headline CPI (2024: gas -5.1% / CPI +2.95%; 2025: gas -5.7% / CPI +2.71%): U.S. Bureau of Labor Statistics CPI series for gasoline (all types) and all-items urban consumers, as compiled at officialdata.org and in2013dollars.com.

– Historical inflation-adjusted gas price benchmarks (2008 peak, 2011–2012 peak, 2022 peak, long-run average since 1918): InflationData.com, “Inflation Adjusted Gasoline Prices,” February 2026.

– 1974 nominal gas price of approximately 53 cents per gallon: Minot Daily News, “Whipping inflation – then and now” (2022), citing federal price data.

– California crude oil import dependence (~75% imported, ~29–30% of foreign crude from the Middle East): California Energy Commission; Newsweek (April 2026); Governing.com (May 2026).

– Behavioral economics of gas prices, the MPG illusion, and hybrid purchase psychology: Richard H. Thaler and Cass R. Sunstein, *Nudge: Improving Decisions About Health, Wealth, and Happiness* (Yale University Press, 2008); Richard H. Thaler, *Misbehaving: The Making of Behavioral Economics* (W.W. Norton, 2015); Larrick and Soll, “The MPG Illusion,” *Science* (2008).

– Bear market causes (commodity spikes among the four primary triggers): J.P. Morgan Asset Management, *Guide to the Markets*, “United States: Bull and bear markets” chart.

– Economic impact of gas price increases (~$1B in annual consumer spending per 1-cent increase at the pump): Brookings Institution; International Business Times.

– 2011 Arab Spring / Libya oil crisis context: U.S. Energy Information Administration, “Brent crude oil averages over $100 per barrel in 2011”; Oxford Institute for Energy Studies, “The Implications of the Arab Uprisings for Oil and Gas Markets.”

– TIME magazine cover, October 14, 1974, “Ford’s Plan: (Mostly) Modest Proposals”; Ford’s Whip Inflation Now campaign and 1973–1974 oil embargo gas rationing: TIME archive; History.com, “How Gerald Ford Tried to Fight Inflation.”

– “There is nothing new under the sun”: Ecclesiastes 1:9.