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Fuel prices are plummeting, but will Bay Area drivers ever see $5 gas again? – Times-Herald

Javad Fardardi experienced something that the Bay Area drivers had not felt at the gas pump for months on Friday.

“Calm down,” he said as he was filling his Saab for less than $ 6 at Berkeley’s Berkeley Gas & Smog.

After record-breaking months, gas prices fell to a statewide average of $ 6.15 a liter on Friday. That’s a drop of nearly 30 cents since the record was set in mid-June, and expert travelers can now grab gasoline in mid-$ 5.

“It makes a difference,” said Fardardi, a psychology professor at Claremont Graduate University, who said the lower price of gas has a big impact on his mental health. He paid $ 76 to fill on Friday, $ 25 less than his last visit to the gas station. “You look [gas price] you sign and you feel safer. ”

Fuel costs are largely due to the falling price of oil that is sinking. now a barrel under $ 100 – Sends concerns about a possible recession through the oil market, according to industry experts.

But drivers hoping to return to gas prices by 2022 – before Russia ruins its oil markets in the wake of Ukraine’s invasion – will have to wait longer. For California travelers, the time to pay $ 4.50 a liter is a long way off, said Patrick De Haan, head of oil analysis at GasBuddy, a company that collects gas price data.

“I don’t think things will return to normal until the global situation returns to normal and Russia leaves Ukraine,” De Haan said, adding that prices are likely to rise in the next six to 18 months, largely depending on the option. an economic downturn. Going forward, gas prices will be “very low and charged,” he said.

In the Bay Area, gas prices are slightly higher than the statewide average, with San Francisco leading $ 6.24 a gallon and San Mateo County behind, according to the AAA. Santa Clara County is the cheapest $ 6.12 a gallon.

Berkeley Gas & Smog, Friday, July 8, 2022, Berkeley, California (Photo: Karl Mondon / Bay Area News Group)

It is also unclear how long the downward trend in gas prices will last. According to the AAA, part of the drop in fuel costs is due to softening gasoline demand as prices rose, but demand could rise this month, reversing the steady downward trend in gas prices.

“Demand for domestic gasoline has been declining recently, which has taken the pressure off pump prices,” AAA spokesman Andrew Gross said this week. “But July is usually the hardest month of demand as more Americans take to the streets, so this trend of easing prices could be short-lived.”

In California, the fall in prices is also somewhat offset by a rise in the gas tax. The July 1 tax increase the price per liter rose by about 3 cents.

BERKELEY, CALIFORNIA - JULY 8: Gas prices continue to fall at Berkeley Gas & Smog on Friday, July 8, 2022 in Berkeley, California. The average price of California gas has dropped nearly 30 cents since its mid-June record. (Karl Mondon / Bay Area News Group)
Gas prices continue to fall at Berkeley Gas & Smog on Friday, July 8, 2022, in Berkeley, California. The average price of California gas has dropped nearly 30 cents from record highs in mid-June. (Photo: Karl Mondon / Bay Area News Group)

Another problem with retail gasoline prices is that oil prices rise rapidly and slowly, although when oil prices fall, economists say a well-documented principle is “up like a rocket, down like a feather.” ”That’s the main thing that forces gas stations to lower prices because of competition from other fuel depots, which often leave a gap of several weeks between oil prices and pump prices.

“People think that stations make more money when prices go up, when it’s the complete opposite,” said De Haan of Gas Buddy. He explained that stations often raise prices as oil costs rise and sometimes lose money at times when oil prices rise. But when prices go down, stations “take time” before prices go down.

In some stations prices have fallen rapidly. At Berkeley Gas & Smog, one of the cheapest stations in the area, the price dropped 15 cents from Thursday to Friday to $ 5.59 in exchange for a regular liter, according to the station manager.

For Aldonia Porch, who put $ 30 in the tank of her Chrysler sedan, the costs of sinking gas are welcome. But saving a few dollars is not enough to cut your home budget.

“You’re too tired to spend time with your kids and grandchildren because you’re worried about your bills,” Porch said, traveling from Richmond to Berkeley. Did you save a few bucks at the pump this week? “It’s a band-aid in a bleed.”

Fuel prices are plummeting, but will Bay Area drivers ever see $5 gas again? – Times-Herald Source link Fuel prices are plummeting, but will Bay Area drivers ever see $5 gas again? – Times-Herald

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