Gas prices in the United States fell below $4 a gallon on Thursday, retreating to their lowest level since March, providing relief to Americans struggling with rising costs of everything from groceries to rent.
According to AAA, the national average price of a gallon of regular gasoline is now $3.99. That’s higher than a year ago, but below a peak of nearly $5.02 in mid-June. Energy costs feed into broad measures of inflation, so the drop is good news for policymakers who have struggled to contain rising prices and for President Biden, who has pledged to cut. Gas costs.
The national average covers a wide range of prices, from $5 a gallon in Oregon and Nevada to $3.50 a gallon in Texas and Oklahoma. But, broadly speaking, the decline reflects several factors: Weak demand, as higher costs keep few; Drivers off the roads; A sharp decline in global oil prices in recent months; And a few states have withheld taxes on gasoline.
Regardless of the reasons, the lower prices are a welcome change for drivers, for whom the added cost — often $10 to $15 extra per tank of gas — has become another hurdle as they try to get their lives back to normal after the coronavirus pandemic. .
“We have new diseases and inflation, and people are expecting a recession,” said Gindy Contreras, a student and part-time worker in Los Angeles, where gas prices hover near $5.40 a gallon. “If I didn’t have to worry about my gas tank being $70, that would be a huge relief.”
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Mrs. Contreras is filling up her 2008 Mazda 3 halfway, as a result of the high prices, which cost her $25 to $30 each visit to the pump, and she’s had opportunities to carpool with friends. These days, Ms. Contreras usually gets gas twice a week, driving 15 miles each week to and from work and driving an additional 10 to 50 miles a week depending on his plans.
“Looking at these high prices at the gas pump, the reduction in affordability is becoming very real,” said Beth Ann Bovino, S&P Global’s chief U.S. economist. “So, in that sense, it’s definitely a positive sign for everybody who’s struggling.”
That cushion — money not spent on gasoline that can go elsewhere — also benefits businesses, especially on price Diesel fuel also decreases. For example, diesel, which is used to fuel farm equipment, construction machinery and long-haul trucks, fell from June’s record, albeit 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 decreased in July An annualized rate of 8.5 percent from 9.1 percent in June, thanks to a fall in gasoline prices. If this continues, the slowdown in inflation will allow the Federal Reserve to ease its campaign to raise interest rates.
Having spent recent weeks, Mr. It would also be a victory of sorts for Biden Gasoline prices are expected to fall, even though he said he expects to do more to cut costs. Mr. Biden has criticized oil companies Record profits from higher oil And gas prices, and this year he released some of the country’s oil reserves, which will result in prices not rising too fast.
“I’m going to continue to do what I can to lower the price of gas at the pump,” he said Explanation At the end of July.
Even as prices fall, economists and consumers say they wonder if this is a temporary reversal.
“I’m not ready for it to go up a little bit again and then I’m here struggling to fill my tank,” said Christina Belliard, a 27-year-old fashion influencer in Bridgeport, Kan.
Ms Belliard bought a Jeep Wrangler last year but now regrets the purchase as the vehicle is not as fuel efficient as the Toyota Camry she previously drove. For work, she sometimes has to travel to locations for her accounts on TikTok and Instagram, sites promoting brands, and attend events in New York City, 60 miles from her home.
Connecticut is one of the states that has suspended taxes on gasoline until November. And Ms. Belliard, who used to spend $95 to $100 a week to fuel her Jeep, now pays $74 to $80. Still, she’s tired of the high jump.
“I’m trying to figure out, how long will this last?” she said.
A difficult question to answer. More than half Petrol price at the pump Global oil prices are determined by and are volatile and subject to a myriad of forces, many of which are difficult to predict.
Oil prices have fallen to their lowest level since the start of the war in Ukraine in February, reflecting growing concerns that a global recession is weighing on demand for crude. There are several reasons why prices could rise again: the trend of war could further constrain global oil supplies, energy investors’ views on the economy could change, and Hurricane later this year Gulf Coast refineries and pipelines could be damaged, cutting off supplies.
For now, however, the steady decline offers some relief to Americans worried about their finances as the economy slows.
“If gasoline prices stay at or near the level they’ve been at, that’s going to be a huge cushion for families,” Ms. Bovino said.
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