free webpage hit counter

Gas prices in the US fall below $4 a gallon

Gas prices in the United States fell below $4 a gallon on Thursday, retreating to their lowest level since March, bringing relief to Americans struggling with the soaring cost of everything from groceries to rent.

According to AAA, the national average price for a gallon of regular gasoline is now $3.99. That’s higher than a year ago but below a peak of around $5.02 in mid-June. Energy costs feed into broader measures of inflation, so the drop is good news for policymakers struggling to contain price increases and for President Biden, who has pledged to lower gas costs.

The national average covers a wide range of prices, from about $5 a gallon in Oregon and Nevada to about $3.50 a gallon in Texas and Oklahoma. But, broadly speaking, the drop reflects several factors: weaker demand, as higher costs keep some drivers off the roads; A sharp drop in global oil prices in recent months; And a handful of states have suspended taxes on gasoline.

Regardless of the reasons, the lower prices are a welcome change for drivers, who find the extra cost — typically $10 to $15 extra — another hurdle as they try to get their lives back to normal after the coronavirus pandemic. .

“We have new rising diseases and inflation and people expect a recession,” said Jindy Contreras, a student and part-time waitress in Los Angeles, where gas prices are close to $5.40 a gallon. “It would be a big relief at once if I didn’t have to worry about my gas tank taking $70.”

Ms. Contreras fills up her 2008 Mazda 3 halfway as a result of high prices, which cost her $25 to $30 per visit to the pump, and she finds opportunities to car pool with friends. These days, Ms. Contreras usually gets gas twice a week, 15 miles to work each week and an additional 10 to 50 miles, depending on her plans.

“The affordability squeeze is becoming very real when you see these high prices at the gas pump,” said Beth Ann Bovino, chief U.S. economist at S&P Global. “So, in that sense, it’s definitely a positive sign for people who are struggling.”

That cushion — cash not spent on gasoline that could have gone elsewhere — extends to businesses, especially as diesel fuel prices drop. Diesel used to fuel, for example, farm equipment, construction machinery and long-haul trucks also fell from the June record, although at a slower pace than gasoline prices.

The drop in gas prices is good news for the economy, as businesses face less pressure to pass on energy costs to their customers — adding to the country’s inflation problem.

The government reported this week that consumer price inflation slowed to an annual rate of 8.5 percent in July, down from 9.1 percent in June, thanks largely to falling gasoline prices. If this continues, the slowdown in inflation will give the Federal Reserve an opportunity to ease its campaign to raise interest rates.

It also serves as a victory of sorts for Mr. Biden, who has spent recent weeks trumpeting the drop in gasoline prices, saying he expects to do more to bring down costs. Mr. Biden has criticized oil companies for their record profits from high oil and gas prices, and this year he released some of the nation’s oil stockpile in an effort to prevent prices from jumping too quickly.

“I’m doing what I can to lower the price of gas at the pump,” he said at a briefing in late July.

Even as they see prices falling, economists and consumers wonder if this is a temporary reversal.

“I’m not ready for it to go a little higher again and then I’m struggling to fill my tank,” said Christina Belliard, a 27-year-old fashion influencer in Bridgeport, Kan.

Ms. Beliard bought a Jeep Wrangler last year but now regrets the purchase because the vehicle is not as fuel-efficient as the Toyota Camry he drove before. For work, she sometimes has to go places for her accounts on TikTok and Instagram, platforms where she promotes brands, and to attend events in New York City, about 60 miles from her home.

Connecticut is one of the states that has suspended taxes on gasoline until November. And Ms. was spending $95 to $100 a week to fuel her Jeep. Belliard is now paying $74 to $80. Still, she’s tired of the high tab.

“I’m trying to figure out, how long is this going to last?” she said.

That is a difficult question to answer. More than half of the cost of gasoline at the pump is determined by global oil prices, and they are volatile and subject to a myriad of forces, many of which are difficult to predict.

Oil prices fell to their lowest level since the outbreak of war in Ukraine in February, reflecting growing concerns of a global recession that could hit crude demand. There are several reasons why prices could rise again: the course of the war could disrupt global oil supplies, energy investors’ views on the economy could change, and hurricanes later this year could damage Gulf Coast refineries and pipelines, halting supplies.

For now, the steady decline gives pause to Americans worried about their finances as the economy slows.

“If gasoline prices stay at or near the level they’ve been at, that means more of a cushion for households,” Ms. Bovino said.

Leave a Reply

Your email address will not be published.

Previous post INTERN $ 22 RAGER: a showcase of NYC subway artists
Next post This new museum is dedicated to a contemporary Turkish artist