Gasoline is about 4% of the CPI basket directly, but its indirect effects (delivery costs, food transportation, airline fares) make it one of the most closely watched prices for inflation forecasters.
When gas prices spike — like 2022 — headline CPI often outpaces core CPI (which excludes energy and food). The Fed watches both because persistent gas-driven inflation can un-anchor inflation expectations even if core CPI remains stable.
For budgeting: gas prices are volatile. Budgeting based on recent highs overestimates typical costs; budgeting on recent lows underestimates. A 5-year moving average is more reliable for household budget planning.