Retail Gasoline Price Pass‑Through to Monthly Inflation Before and After the COVID‑19 Pandemic

Abstract

This paper examines the influence of U.S. gasoline price fluctuations on the CPI before and after the pandemic, focusing on the short period and long run pass-through of gasoline prices to the inflation. Using an ARDL-UECM model to analyze 182 sets of monthly data from 2010 to 2025, this study aims to estimate gasoline prices’ shortterm impact on CPI and their long-term equilibrium. Subsequently, by setting step dummy variables, it compares the COVID-19 pandemic’s effect on this pass-through effect and whether structural changes occurred. Three core conclusions emerge: First, a significant and statistically robust long-term pass-through exists from gasoline price fluctuations to CPI. A 1% increase in gasoline prices raises the CPI by 0.37%. Second, the error correction model indicates there are temporary deviations from long run equilibrium in temporary phenomena that will be corrected at a rate of 1.48% per month. Finally, the study finds that the pandemic shock caused a structural increase in the price level, shifting the long-run equilibrium of the CPI upward by 13.0% post-pandemic. This suggests that the pandemic’s impact did not stop at short-term effects but brought about broader long-term changes.