Gas prices are still higher than they were a year ago, but San Diego drivers are feeling some financial relief at the pumps as they hit the highways for what is expected to be a busy and record-breaking weekend.
The average price of a gallon of regular gasoline fell 5.5 cents to $5.244 on Tuesday, according to AAA of Southern California. That’s 22.3 cents lower than a week ago and 53.6 cents lower than a month ago – extending a downward trend that has lasted nearly two months.
On October 5, the San Diego area hit an all-time high average of $6.435 per gallon.
“Unfortunately, we’re used to paying the prices we pay, so when prices were above $6 a gallon, it was surprising,” said Auto Club spokesman Doug Shupe. “Now they’re in the mid-five range and people say, ‘Oh, that’s not so bad.’ But we still have to put into perspective that we’re significantly higher — 58 cents higher — than last year at this time for the San Diego average.”
Expect traffic over the holiday weekend.
AAA predicts that Wednesday through Sunday travel volume in Southern California will reach 4.5 million for all modes of travel (cars, planes, buses, etc.). That’s a 2.5 percent increase over last year and the largest number of travelers for the Thanksgiving weekend since the Auto Club began tracking the numbers in 2000.
Nationwide, AAA predicts this Thanksgiving will be the third busiest in history – 54.6 million passengers, compared to 58.6 million in 2005 and 56 million in 2019.
“Despite inflation, despite high gas prices, people are prioritizing their budgets to spend quality time and spend the holidays with their friends, family and their loved ones,” Shupe said. “Especially after two years of canceling plans, postponing or postponing vacations (due to the pandemic), people are ready to spend the holidays and have those traditions that they’ve missed so much in the last two years.”
Fuel analysts highlight a number of reasons for the recent drop in gas prices.
First, a series of at least five scheduled and unscheduled outages at California oil refineries that sent West Coast gasoline supplies plummeting in September was cleared up.
In addition, demand for gasoline has decreased compared to the summer driving season, when many families go on vacation. In addition, strict restrictions due to COVID-19 have returned in China, reducing oil consumption in the world’s second largest economy. That contributed to a drop in the price of Brent crude oil – the international benchmark – from nearly $100 a barrel on Labor Day to around $88 on Tuesday.
“If the oil markets don’t reverse overnight because of some geopolitical momentum or whatever, San Diego could easily drop below $5 (a gallon), and you’ll see some stations drop below $4,” said Patrick De Haan, host oil analysis at GasBuddy, a technology company that helps drivers find the cheapest places to buy gas. “It depends on how quickly the cells pass it on.”
GasBuddy data indicated that Costco in Mission Valley was selling regular gas for $4.49 a gallon on Tuesday.
“We could see those prices below $4 maybe by Christmas, if everything holds,” De Haan said.
With prices reaching incredible levels in late summer, gasoline has been a hot political topic.
Gov. Gavin Newsom has accused oil refiners of price gouging, and in October announced the calling of a special session of the California Legislature starting Dec. 5 to discuss price spikes. On Twitter, Newsom said: “Gas prices are too high. It’s time to impose a windfall tax directly on the oil companies that cheat you at the pump.”
Some economists have questioned whether the windfall tax will have much of an impact on California gas prices.
The California Energy Commission will hold a hearing next week on high gas prices, the state’s refinery operations, oil company profits and how to insulate consumers from price shocks as the state plans to transition away from fossil fuels.
The commission invited major refiners to appear, but almost all left it to the trade group Western States Petroleum Association to participate on their behalf.
A senior vice president for PBF Energy, in a letter to the commission, said that “Governor Newsom’s politicization of this issue, compounded by the misinformation he published and commented about PBF’s ‘third quarter earnings,'” precludes us from participating in this hearing. “
The letter does not specify which information was misleading. In a press release issued on October 27, Newsom complained about the oil company’s profit and pointed to PBF’s third-quarter financial report, saying the refinery’s profit jumped from $59.1 million to $1.06 billion, compared to the same period last year.
“The number one reason is that we’re seeing a few scheduled and unscheduled maintenance issues at some refineries,” said Annleyn Venegas, a spokeswoman for AAA. Venegas says as of Wednesday, at least three California refineries were undergoing overhauls, reducing fuel production.
Will prices go back down?
Caldwell estimates that the inflation rate will average around 1.5% between 2023 and 2025. “While the consensus has largely abandoned the ‘passing’ story of inflation, we still think that most of the sources of today’s high inflation will disappear and even ease in impact, over the next few years,” says Caldwell.
How long will high prices last? Economists and financial experts agree on one thing: higher prices are likely to last until next year, if not longer. And that means Americans will continue to feel the pain of higher prices for the foreseeable future.
Will grocery prices go down in 2023?
According to the report, food prices are expected to rise more slowly in 2023 than in 2022. However, they will continue to rise at rates above the historical average. Overall, food price inflation is forecast to rise between 2.5% and 3.5%. Food prices at home are forecast to rise between 2-3 percent.
Will 2022 prices go down?
Even as demand falls, extremely low supply is likely to prevent significant price declines. Prices may fall slightly in 2023 as high mortgage rates keep demand low. Most major forecasts predict that house prices will be between 6% and 10% higher by the end of 2022 than they were a year ago.
Will 2022 be a good time to sell?
According to Redfin data, 59.2% of homes sold above list price in May 2022. That’s a 16.7% increase from January of that year. House prices also tend to spike as early as March to keep up with strong demand from homebuyers.
Will 2023 be a better year to buy a house?
Despite the expected drop in housing prices in 2023, buying a house will become more expensive. According to a new Freddie Mac projection, the price of a home for sale is expected to fall. 2% in 2023. Meanwhile, the average 30-year fixed-rate mortgage is expected to rise to 6.4%.
Will US home prices drop in 2022?
DATA FOR THE SECOND QUARTER OF 2022 Moody’s Analytics researchers are a little more inclined. It predicts a 10% peak-to-trough drop in U.S. home prices, with prices bottoming out in late 2025. However, if a recession occurs, Moody’s Analytics would expect a larger peak-to-trough decline of 15% to 20% .
Do prices ever drop after inflation?
The Federal Reserve Bank and many experts believe that inflation is more temporary than long-term. Once the supply chain issues are resolved, “in many cases those prices will actually come down,” says Dean Baker, senior economist at the Center for Economic and Policy Research, an economic policy think tank.
How long did inflation last in the 70’s?
In 1970 it reached 5.5% and then continued to rise between 5.5 and 14.4% throughout the 1970s before culminating at 14% in 1980. By comparison, today’s global inflation has only recently topped before the pandemic, because in mid-2021 (on average 5% in 2021–22 and 7% in March 2022).
What happened after inflation in the 70s?
The 1970s saw some of the highest rates of inflation in the United States in recent history. On the other hand, interest rates rose to almost 20%. Fed policy, the abandonment of the golden window, Keynesian economic policy and market psychology contributed to high inflation.
Will prices ever go down after inflation?
And experts say it will likely be several years before prices really come down from the highs seen this year. October inflation data showed that high prices eased for the month, up 7.7% from last year, less than analysts had expected. It is the first sign of a major drop in inflation since spring 2022.
Why are San Diego gas prices going up?
Experts blamed the jump in gas prices in California on the fact that most of the country is already using the winter blend of gasoline, which is cheaper than the summer blend that California will continue to use until November.
What is causing gas prices to rise in CA? Patrick De Haan, head of petroleum analysis at Gas Buddy, attributes rising gasoline prices in the Golden State to high gas taxes and limited supply from oil refineries, among other factors. “When one little thing goes wrong, the refinery can be offline for days,” De Haan said.
Why have gas prices suddenly gone up?
Gasoline demand is rising, and global supply will remain tight after OPEC’s decision, which means higher prices.
Why is gas prices dropping?
Although demand for gasoline has increased slightly, it is still almost 400,000 bbl lower than this time last year. Fluctuating oil prices and low demand contribute to the decline in national average prices. Today’s national average of $3.76 is three cents lower than a month ago and 36 cents higher than a year ago.
Will gas prices go down in 2023?
Meanwhile, the Energy Information Administration projects that the average price of a gallon of gas is expected to be $3.57 in 2023, compared to $4.05 in 2022.
What is the future for gas prices?
Prices are expected to continue to fall during the year. If that trend continues into 2022, you can expect the price per gallon to continue to drop. However, historical trends are not the only reason to believe that fuel costs will continue to decline through 2022.
Who does the US buy its gas from?
The top five source countries for gross US oil imports in 2021 were Canada, Mexico, Russia, Saudi Arabia and Colombia. Note: The ranking in the table is based on gross imports by country of origin. Net import quantities in the table may not equal gross imports minus exports due to independent rounding of data.
Does the USA get gas from Russia? The United States has imported a relatively small share of crude oil from Russia, but US imports of petroleum products from Russia – specifically crude oil and fuel oil – are a larger share. American refineries use imported crude oils and fuel oil as a supplement to crude oil in the refining process.
Who gives USA Gasoline?
But the US energy supply is very diverse, and many other nations have followed Russia: Colombia (65 million barrels); Ecuador (54 million); Iraq (55 million); Brazil (37 million); Nigeria (39 million); Libya (32 million); Guyana (27 million); and the UK (14 million).
Does the President control gas and oil prices?
Truth be told, US presidents have very little control over the price per gallon. (Editor’s note: This blog was originally published on February 3, 2021 and updated on November 1, 2022 to reflect changes in the retail fuel market, including record gasoline prices.)
Who controls gas and oil? State agencies. US states have government agencies and commissions that are responsible for regulating the oil and gas industry in their states, which can often have a broader impact. States have authority over pipeline transportation that takes place entirely within a single state.
Who controls the price of oil?
The price of oil is determined on the world market. Oil is traded globally and can easily be moved from one market to another by ship, pipeline or barge. As a result, the balance of supply and demand determines the price of crude oil around the world.
Does OPEC set oil prices?
In 2021, OPEC estimated that its member countries possess more than 80% of the world’s proven oil reserves. Because of the group’s large market share, its decisions affect global prices. Its members meet regularly to coordinate how much crude oil they will collectively sell on global markets.
Is oil controlled by the government?
Oil and gas resources in the US are mostly privately owned, unlike countries where natural resources are owned by the government.
Who controls 80% of the world’s oil?
According to current estimates, 80.4% (1,241.82 billion barrels) of the world’s proven oil reserves are located in OPEC member countries, with the largest share of OPEC oil reserves in the Middle East, accounting for 67.1% of OPEC’s total reserves.
Who controls the gas prices in the United States?
Five Fast Facts About US Gasoline Prices. Oil prices are determined by the market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.
Who influences the price of gas?
Because of America’s dependence on imports, US gas prices are heavily influenced by the global crude oil market. A number of geopolitical factors can affect the crude oil market, but one of the biggest influences is the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia.
Does the government control the price of gas?
It’s that they have very little control over it. Yes, politics and legislation can certainly play a role, but gas prices largely dictate oil prices, and oil prices depend on supply and demand.
Does the government control the price of gas?
From a high of $5.02 per gallon of regular, the national average has now fallen to $3.68. Drivers suffering from price spikes may be wondering “Who controls fuel prices?” The short answer is: No single person, company or government can be said to set gas prices.
How does the government affect the price of gas?
Taxes add to the price of gasoline. On average, state taxes and fees are about 39 cpg, and combined with federal taxes average 57 cpg at the pump. Sales taxes along with taxes applied by local and municipal governments can also increase gasoline prices in some locations.
Who controls the price of gasoline?
Gasoline prices are determined mainly by the laws of supply and demand. Gasoline prices cover the costs of procuring and refining crude oil, as well as distributing and marketing gasoline, in addition to state and federal taxes. Gas prices also correspond to geopolitical events that affect the oil market.
Does the government control oil prices?
Today, the U.S. oil, gas, and coal markets are generally free from price controls and trade restrictions, but Congress still manipulates the energy industry with tax breaks, consumption subsidies, and environmental regulations.
