If gasoline hits $4 a gallon, it could push the U.S. economy back into a recession, says investment guru Jim Cramer. "I've never been a believer in the double-dip scenario," says Cramer, according to CNBC.
"But with $4 gasoline, it could happen, especially if high fuel costs create a palpable sense of inflation, which causes the Fed to tighten too soon."
The national average for a gallon of regular gasoline is around $3.124, according to AAA.
|A San Rafael, Calif., customer pumps gas.
Higher gasoline prices act like a tax, taking money out of people's pockets and forcing them to spend less, Cramer says.
Unrest in the Middle East has sent oil prices rising, particularly now that it has spread to oil-rich Libya.
Saudi Arabia, the United States and the International Energy Agency have said the world could make up for any shortfalls stemming from disruptions to Libyan oil output.
Three Democratic lawmakers have urged President Barack Obama to tap the Strategic Petroleum Reserve (SPR) now that the Middle East Turmoil has pushed oil over $100 a barrel.
Massachusetts Representative Edward Markey, Connecticut Representative Rosa DeLauro, and Vermont's Peter Welch have said in a letter to the president that supply disruptions and subsequent speculation in oil markets make tapping the reserve necessary.
"We therefore urge you to consider leveraging the SPR to respond to these supply disruptions and combat the rapid price escalations," the congressmen said in a letter, according to CNN.
The nation's strategic reserve holds 727 million barrels of oil, enough to cover U.S. oil imports for 85 days, or most of the oil exported from the Persian Gulf for 48 days, CNN reports.
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