SAN DIEGO (KGTV) — For the first time since 2022, the national average for gas is more than $4 a gallon, a dubious milestone driven by the Iran war.
In San Diego, prices are even higher, averaging $5.94 a gallon. Gas has gone up more than $1 since the war began on Feb. 28, marking the largest monthly jump since AAA started keeping track.
The rising cost of gas is forcing people to spend less money elsewhere, which could eventually hurt the local economy and increase the prices of everyday products.
Alan Gin, an economics professor at the University of San Diego, said the impact extends far beyond the pump.
"We primarily think about oil, and that is a big concern, but there are a lot of other products," Gin said.
Because San Diego is not a hub for heavy industrial production, the county relies on products to be shipped. The companies delivering those products rely on diesel fuel, which is up $1.50 since the start of the month.
"Any products that are shipped, I think we're gonna see price increases relatively soon as far as that is concerned, and that includes the food being shipped into the county," Gin said.
This means the price of groceries will go up, but so too will other common everyday products you might not even be considering at the moment, creating a ripple effect that will hit your wallet eventually because of the hit to the global supply:
- Aluminum: Already rose to a four-year high on Monday, making it more expensive to produce and purchase things like soda cans
- Helium: Used to make semiconductors, meaning electronics will increase in price
- Petroleum: A key contributor to the production of plastic
"Spending this money on gasoline and higher prices of other products, that could then lead to a slowdown as far as the economy is concerned," Gin said.
He used the owner of a yoga studio as an example. Someone might appear to be unaffected by this war.
However, if people have to start making decisions on where they spend their money, that means they might take fewer yoga classes, and fewer clients means a decline in revenue.
Gin calculated what this economic slowdown could look like. He said about 100 million gallons of gas are sold every month in San Diego County.
For every one-cent increase in gas prices, Gin figures that means $1 million more is spent on gas that could have been spent in the local economy.
Based on that equation, the county has missed out on at least $130 million in the last month, since prices went from $4.64 to $5.93 (increase of $1.31), with millions more to come.
Follow ABC 10News Anchor Max Goldwasser on Instagram, Facebook, and Twitter.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
