SAN FRANCISCO (KCBS RADIO) – Gas prices this week have fallen below $6 per gallon in some parts of California, the biggest drop so far this year.
Prices have been skyrocketing around the country this year, and Californians, in particular, have been feeling the pain at the pump.
The change has a lot to do with improvements in the global gas supply chain, Patrick de Haan, Head of Petroleum Analysis at GasBuddy told KCBS Radio on Thursday, along with other factors. "California had also been afflicted with some refinery issues that have moved to the rearview mirror," he said.
Another major factor in the shift may be tied to rising inflation in the United States and the subsequent economic slowdown.
"There's more consensus the federal reserve is going to have to throw cold water on the economy by raising interest rates," he said. "And the concern is that we would see an economic slowdown or a recession, which could limit demand for oil, gasoline and other such fuels."
In the Bay Area, prices are on average down by about 60 cents a gallon from about a month ago. The previous price was $6.64 a gallon, now it's at $6.04.
Right now the average price statewide is $5.99 a gallon, according to Auto Club’s Weekend Gas Watch in a Thursday press release from AAA. That's 20 cents less than it was last week.
The cheapest county in California to get gas in right now is Yuba County, which has gas at $5.76 a gallon, according to AAA's county-wide breakdown. The most expensive gas is Mono County, at $7.07 a gallon.
Gas in the Bay Area was still relatively high, with Napa County the highest at $6.16 a gallon. But this may soon change.
"It's just a matter of time before Bay Area prices fall under that average of $6," said de Haan. "And we could, if everything stays consistent, see another decrease over the next four to six weeks."
That additional decrease could be anywhere from another 55 or 85 cents less than where it is now, barring any major natural disasters or geopolitical events.
This comes despite restrictions on Russian oil that have gone into place this year after the invasion of Ukraine. The European Union and the United States have enacted sanctions against Russian oil, but that doesn't stop other countries like China and India from continuing to use it. "Russian oil still continues to make it to the global market," said de Haan. "And that’s why oil prices have been falling."
The national average at the pump is much lower than California, at $4.61 a gallon, according to the AAA release, which is 14 cents less than last week.
It's likely the national average will continue to fall as well in the coming weeks, barring any extreme events.
It could even fall below $4 per gallon, said de Haan, by mid-August.
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