Cheaper food and gasoline are providing some relief from U.S. inflation
U.S. consumer inflation eased in March as cheaper gasoline and food prices provided some relief to households struggling under the burden of rising prices. (April 12) (AP Video: Cody Jackson)
AP
The national average for a gallon of gasoline fell last week despite a turbulent period in oil prices after Hamas launched an attack on Israel.
The price of a gallon of regular unleaded fell about 12 cents to $3.628 on Friday, according to AAA, a nonprofit association of auto clubs that monitors fuel costs. The decline comes even as oil prices rose about $5 last week to about $90 a barrel. The price of crude oil refined into gasoline is more than half the price of a gallon of fuel.
However, this price increase is a far cry from the temporary surge of around $40 a barrel following Russia’s invasion of Ukraine last year, AAA says. The key difference is that Russia is a major oil producer, while Israel and the Palestinian territories are not, it said.
“Unless this war spreads to additional countries in the region, the impact on the oil market will remain muted,” AAA spokesman Andrew Gross said in a statement.
Why are gasoline prices falling?
With a national average of $5,669 for a gallon of unleaded gasoline, Californians may not feel much relief at the pump. But prices are lower, about 21 cents less than a week earlier, at $5,878, AAA says.
Pump prices are falling in the Golden State, like the rest of the country, due to lower demand from drivers and the fact that cheaper blends of winter gasoline come onto the market. California actually rolled out its winter blend earlier than usual, and it contains a larger amount of a cheaper ingredient that makes cars easier to start in lower temperatures. Typically, California doesn’t make the switch until the end of October. Winter blended gas can save 15 to 20 cents per gallon of gasoline, said Doug Shupe, AAA spokesman in California.
Why is gas so expensive in California?
California gas is generally more expensive than the rest of the country for the following reasons:
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Will gas prices continue to fall?
Yes, according to experts.
If violence in the Middle East does not continue to spread and there are no further geopolitical shocks, “I remain optimistic that the national average could fall another 25 to 45 cents by the end of November, with prices potentially falling nearly three times as much as in.” California,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
But he said: “All eyes will be on the Middle East in the coming days to see what might develop.”
According to EIA, in 2018, more than 20% of the world’s liquid petroleum was transported through the Strait of Hormuz, which lies between Oman and Iran and connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.
Medora Lee is a money, markets and personal finance reporter for USA TODAY. Reach her at [email protected] and sign up for our free Daily Money newsletter every Monday through Friday morning for personal finance tips and business news.