After months of gasoline prices making life more expensive, they’ve quietly begun to go down – financially supporting many Americans.
The national average price this week is $4.49 a gallon, down from a peak of $5.01 in June. The average gas price is still about $1.30 higher than it was a year ago, but is now down for more than a month.
That’s good news for consumers: Higher gas prices don’t just affect people who fill up, but they also affect higher transportation costs, the price of almost everything else.
Falling prices are also good news for political and social stability. Because gas prices are so obvious – posted on giant signs across the country – they have a huge impact on how Americans feel things are going, experts say. Emotions can extend beyond financial worries.
See how Russia’s invasion of Ukraine sent gas prices in the West skyrocketing as Europe announced it would stop relying on Russian oil and gas. American and European leaders have worried since the start of the war that rising gas prices could undermine public support for efforts against Russia, because people can find the personal costs to be too great. So falling gas prices could help maintain public support for Ukraine.
Historically, rising gas prices have also hurt incumbent political leaders. Sure, rating approves President Biden and European leaders fell due to rising prices of gas and other commodities. Left unchecked, it’s the kind of widespread outcry that can lead to global political instability and extremism. In Italy, for example, the recent collapse of the government may give way to a takeover by a far-right coalition consisting of a political party with neo-fascist roots.
However, gas prices have something deeper than partisan politics or any personal policy debate: They help regulate the mood of the public. As the pandemic subsided, Americans were hoping for a return to normal. But rising gas prices and inflation, along with an increase in violent crime and war in Ukraine, are instead to blame. sense of chaos and wider anomie was provided by Covid. It’s as if Americans traded some crises for others.
“Is this real?” Caroline McNaney in New Jersey recall thoughts. “I worked part-time from home to earn more money, and now I feel like I can’t do anything for myself because the gas is so high.”
Then, the price of gas dropped, providing the kind of feeling of regret people long for after a tumultuous few years.
Why is the price of gasoline falling?
Several factors behind the good news. Oil and gas production has increased America and other placessupply is increasing. Many people drive less To avoid high prices, demand falls. The continued disruption of Covid, especially in China, also played a role; The closures resulted in fewer people traveling, reducing global demand for oil and gas.
The process is gradual – the result of what experts call the “rocket and feather” effect: Gas prices tend to rise as fast as a rocket and fall more slowly, like a feather. . Gas stations raise prices faster and lower prices more slowly to maximize profits. And while rising gas prices cause consumers to compare-shop more, falling prices reduce the need to do so – reducing competitive pressure.
What’s next?
Because gas prices fall more slowly than they rise, they still have room to fall further in the coming weeks — to catch up with falling oil prices, said Christopher Knittel, an economist at MIT.
And as odd as it sounds, a weakening economy could help lower gas prices even further. The Federal Reserve recently raised interest rates, raising borrowing costs in an effort to drag demand and tame inflation. That could lead to more unemployment, but could also cause prices to slow after months of record inflation.
Over the next few weeks, the future of gas prices will be less certain. “There are still risks out there,” said Rachel Ziemba, an energy expert at the Center for a New American Security.
Among them: More atrocities in Ukraine can promote further Europe stops buying Russian oil and gas. Russia could retaliate against Western sanctions by withholding its shipments, tightening supplies around the world once again. Climate change continues to make oil and gas companies wary of ramping up overproduction. China’s economy could improve and increase demand, especially if Covid restrictions ease.
But for now, falling gas prices are good news in a summer ravaged by headlines about inflation, war, heatwaves and rising Covid cases.
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