High gas prices impact lower income households the most, according to a new study. If the cost of car fuel reaches $6 per gallon, drivers earning up to $40,000 per year will be spending 11% to 38% of their after-tax take-home pay.
By comparison, those making $150,000 or more are paying 2.8% to 4.9% of their after-tax earnings, according to a study by car insurance app Jerry.
"Rural drivers would take a bigger hit than urban and suburban residents, paying 9.4% of their after-tax income at $6 a gallon, compared to 6.3% for urban drivers," said the study.
Right now regular gasoline prices are just pennies away from reaching a national average of $5 per gallon. In 18 states, that level has already been reached. California's average is sitting above $6 per gallon.
On average, U.S households would spend about $4,600 with gasoline at the $6 level, says the study.
Consumers are paying about $2 more per gallon for fuel than they did a year ago. The drive-up in prices may be impacting consumer's driving behavior and demand.
"One could argue that demand destruction for gasoline has already started," Peter McNally, global sector lead for industrials, materials, and energy at Third Bridge, recently told Yahoo Finance.
Consumers in states where gas is cheaper than the national average may be experiencing even more pain at the pump than drivers in other states. That's because their average hourly wages are lower. A CNN analysis shows residents of Mississippi and West Virginia need to work more hours to fill up their tanks— even though they pay less than the national average for gas.
JPMorgan analysts recently predicted the national average of gasoline could hit $6 per gallon — and go even higher by August.
Ines is a markets reporter covering equities. Follow her on Twitter at @ines_ferre
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