Tyler Schipper, an associate professor of economics at the University of St. Thomas, spoke with KARE 11 about how rising gas prices are contributing to higher inflation across the economy. Schipper explained that increases in fuel costs are affecting not only what consumers pay at the pump, but also prices at grocery stores and retail businesses as transportation and supply chain expenses climb.
From the story:
University of St. Thomas Economics Professor Tyler Schipper says even if both the federal and state gas taxes were put on hold, the price of gas in Minnesota would still be higher than it was before the Iran conflict started.
“We might not see gas prices where they were before the Iran conflict until 2027,” Professor Schipper said.
Schipper is also concerned that higher gas prices are also leading to higher inflation for the U.S. economy as a whole.
The latest Consumer Price Index released Tuesday morning showed the annual inflation rate increased to 3.8%, the highest since May of 2023.
Back in February, before the conflict in Iran began, inflation was sitting around 2.4%
“Unfortunately it means that people are probably going to have to settle in for higher prices, not only for things that you buy when you go to the gas station, but also the retail store, the grocery store those prices are also going to start to rise,” Professor Schipper said.
He suspects the Federal Reserve isn’t going to lower interest rates any time soon, and he isn’t expecting any relief right away for gas prices either, because he says even if the conflict ends tomorrow it would take some time for prices to go back down.
