24/7 Wall St. Insights
- Gasoline and oil prices have weighed less on consumers in recent weeks.
- However, the price in California remains a considerable burden on disposable income.
- Also: Dividend legends to hold forever.
Gasoline prices have hardly moved in the past month and have come down slowly in the past year. Few people worry about future increases in most states because oil prices are low. However, in the summer of 2022, the price for an average gallon of regular nationwide was close to $5. The price of many other goods and services was high as the consumer price index increase was up 8% year over year in most months. The cost of living across the board had soared. Gas prices mattered.
Gas prices may have fallen sharply since 2022. However, the price in California is $4.50 a gallon, which weighs on many drivers.
The price for a 15-gallon gas tank nationwide is about $30. In California, that is $45. Over the course of a year, someone who drives frequently or long distances can pay hundreds of dollars more for gas than Americans who pay the national average. For a middle- or lower-class family, that is a considerable burden on disposable income. A decline in inflation over the past two years helps Californians, but those hundreds of dollars a year could still be a budget changer.
Gas prices in California are particularly expensive because of the gas tax burden. The $0.8655 per gallon there compares to the national average of $0.5709. The state with the lowest tax is Alaska, at $0.3533. For a 15-gallon tank, the difference between the two states is $7.
The electric vehicle market share in California is 26%. The national average is less than 7%. In Louisiana, where low-price gasoline is abundant, the number is below 2%. Do people in California care more about the environment than in most states? The high price of gas may matter more.
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