The Gas Tax Squeeze
DOWNLOAD PDF ↓“We have a temporary period of elevated energy prices, but it will not be long. In the worst case this is weeks. This is not months.” — Chris Wright, U.S. Energy Secretary, 9 March 2026
TL;DR: Chicago gas jumped from $3.52 to $3.79 in 48 hours as Brent crude whipsawed between $92 and $120. The Strait of Hormuz is 95% shut with 400 tankers stranded. G7 meets Tuesday on a 400M-barrel SPR release that buys weeks, not months. Illinois’s $0.90/gal tax stack amplifies every cent. People’s Gas still wants $202M from ratepayers who can’t pay.
Key Numbers
- $3.79/gal — Chicago city average (up 27c since Mar 8); peak station: $4.69
- $92–$120/bbl — Brent crude range on March 10 alone (Trump peace signals crashed it)
- 95% — Strait of Hormuz traffic reduction; 400 tankers stranded in the Gulf
- 300–400M barrels — Proposed G7 SPR release (< 3 weeks of disrupted supply)
- $0.90/gal — Chicago’s total gas tax stack; no tax holiday planned
- $202M — People’s Gas rate hike request; 146,899 customers behind on bills
- $1.50/mi + $7 min — Proposed Chicago rideshare driver pay ordinance
What’s Happening
Brent crude hit $119.50 Monday morning before Trump suggested the war “could soon be over,” crashing it to $92 by afternoon. The volatility is extreme but the underlying crisis is unchanged: the Strait of Hormuz is effectively sealed, P&I insurance has been pulled, and no commercial tankers have accepted U.S. naval escort offers. The G7 energy ministers meet Tuesday to decide on a coordinated SPR release of up to 400M barrels—but at 20M barrels/day of disrupted flow, that’s less than three weeks of cover.
In Chicago, the structural amplifier is the tax stack. Every global price movement gets magnified by Illinois’s percentage-based sales tax calculated on top of excise taxes. Summer-blend transition will add another 15–25 cents. Meanwhile, People’s Gas presses for $202M more from a customer base where 147,000 households are already behind, and gig workers earning $13/hour watch their per-mile margins evaporate.
Scenarios (Revised from Mar 8)
| Scenario | Probability | What It Means |
|---|---|---|
| Negotiated Wind-Down (Trump deal) | 20% | Gas drops to $3.20-3.40; brief pain |
| Prolonged Closure (3-6 mo) | 35% | Gas hits $4.50-5.00; cascading cost crisis |
| G7 Stabilization (SPR + escorts) | 20% | Gas holds $3.50-4.00; volatile but managed |
| Escalation (wider conflict) | 15% | Gas exceeds $5.50; approaches 2022 records |
| OPEC+ Flood (output surge) | 10% | Gas stabilizes ~$3.30-3.50; taxes persist |
What You Can Do
- Track prices on GasBuddy; city-to-suburb spread is 12c ($3.79 vs $3.67)
- Fill up in Indiana — NW Indiana avg $3.50, saving 29c/gal
- Take CTA — fares NOT raised for 2026; 30-day pass ($75) < one tank
- Apply for LIHEAP utility assistance: 1-877-411-WARM
- Comment on People’s Gas rate case at the ICC: 800-524-0795
- Watch the Tuesday G7 meeting — SPR decision will move prices within days
Best Memes From the Report
BRENT CRUDE AT 6AM: $120 / BRENT CRUDE AT NOON: $92 — Oil traders experiencing the full range of human emotion before lunch
G7: “WE’LL RELEASE 400 MILLION BARRELS” / HORMUZ DISRUPTS 20 MILLION BARRELS PER DAY — That’s 20 days of hope. Then what?
ENERGY SECRETARY: “WORST CASE, THIS IS WEEKS NOT MONTHS” / 400 TANKERS STUCK IN THE PERSIAN GULF: “SURE, BRO” — When the reassurance needs its own reassurance
GP-RPT-2026-009-R2 | 10 March 2026
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