Efforts to fight inflation helped by falling gas cost
The cost of gasoline and diesel has been falling in the United States, welcome news for efforts to reduce inflation.
A gallon of regular gasoline in August cost an average of $3.39, down nearly 12% from a year earlier, according to the Energy Information Administration. Diesel prices fell even further – around 15% year-over-year – to $3.70 a gallon last month. Prices have continued sliding in September, and the average price of regular gasoline on Wednesday was $3.25 a gallon, according to the AAA motor club.
Those declines partly reflect sliding oil prices. Americans also have been using less gasoline and diesel this year than they did last year, federal data show.
“The American commute is just not what it was, and I don’t know if it’ll ever get back there,” said Patrick De Haan, head of petroleum analysis at GasBuddy, a company that tracks fuel prices.
Overall, energy prices, a category that includes fuel, electricity and natural gas, fell 0.8% on a monthly basis in August and 4% from a year earlier, according to the consumer price index report released Wednesday. Average prices for all types of gasoline fell a whopping 10.3% over the past 12 months.
U.S. oil prices, which were a touch below $75 a barrel at the end of August, have tumbled further in the past 10 days, sagging to around $66 a barrel on Tuesday amid concerns the world may soon have more crude than it needs. Oil now costs roughly half what it did in late spring 2022, after Russia invaded Ukraine.
Markets have grown particularly jittery about weakening oil demand in China and robust supply from producers in the United States and elsewhere. Last week, as prices were falling, OPEC, the oil cartel, agreed to delay plans to increase production until at least December.
But the move does not appear to have had the intended effect, and prices have continued to fall.