NEWS

Rising Gas Prices

Consumers suffer after California fuel costs increase

By Morgan Owen

This month, gas prices in Los Angeles County surged to a peak average of $6.49 per gallon, breaking record highs set last summer. On the Westside, prices can be over $7 per gallon. This recent price hike sets California apart from the rest of the nation, where consumers who did not experience the same dramatic new prices are paying an average of $2.50 less per gallon. In response, Governor Gavin Newsom dramatically called for an additional tax on oil companies that would be paid out to California consumers. “We’re not going to stand by while greedy oil companies fleece Californians. Instead, I’m calling for a windfall tax to ensure excess oil profits go back to help millions of Californians who are getting ripped off,” said Newsom in an announcement on Sept. 30. The cause attributed to the recent hike in prices was maintenance related slowdowns and stoppages experienced at several refineries that produce California’s specially mandated blend of gasoline. Newsom says oil companies should have anticipated these slowdowns. Even though crude oil prices were down $25 per barrel since the end of August, oil companies have still increased prices in California and some nearby states, shocking consumers with the price at the pump. “This is outrageous,” said one woman as she filled up her car. “I’ve never paid more than $100 for this car.” In a bid to further provide relief to consumers, Newsom has asked oil companies to switch prematurely to winter-blend fuels, disappointing environmentalists. The effects of this switch are expected to be seen over the next month, as prices are expected to drop $1 per gallon.

Gas prices listed at over $7 per gallon at the Chevron at the corner of South Centinela and Major Street in Playa Vista.

Electric Vehicles Don’t Offer Salvation

California already has the most expensive gas prices in the country, with a gas tax of 53.9 cents per gallon. To make matters worse, California’s gas tax rebate has not yet reached consumer’s pockets, though its distribution is expected soon. The rebate, passed several months ago, was meant to offset California’s pricy excise tax by granting $350 to individuals making less than $75,000 and $700 for joint filers making less than $150,000. The solution to beating high gas prices would appear to be electric vehicles, but the reality isn’t so simple. Scott Painter, CEO of the electric vehicle subscription company Autonomy, says it’s difficult for consumers to rationalize purchasing electric vehicles in the current economy. Even though they are more cost effective and environmentally friendly, high prices and newly increased interest rates make owning an electric vehicle less accessible… and that’s if the consumer can even get their hands on one amid production shortages. “While I’d love to buy a more sustainable type of vehicle, it’s really hard to justify spending $30,000 to save some gas money,” said Miller Roman, who lives in Marina del Rey. “Not to mention charging an EV when you rent is complicated.” That difficulty does not change the fact that California recently instituted an initiative to eliminate the sale of new gas powered vehicles by 2035. “California has always led the way in terms of emission restrictions… I think that the goal of getting to 68% [zero-emissions cars] by 2030 is the one that is going to be most interesting to me. I think that right now, the industry is not making enough electric cars.”

Everyone Is Still Feeling “The Squeeze”

After speaking with Roman, he said that he’s worried about “never being able to afford the ‘American Dream.’” Constant fluctuations in gas prices and the state of the economy are making it difficult to invest and put away savings, then add to that rent, grocery bills, and utilities. He is keenly aware that his dollar isn’t as valuable as it was before. Even though national gasoline prices decreased by 10.6% in August, that decrease slowed to -4.9% in September. Necessary food commodities have also continued to rise. The price of eggs is up 30.5% from last year, and potatoes are up 17.5%. The most dramatic increases were in food at employee sites and schools, a food source many people rely on, at 19.3% from July to August and 44% from August to September. Rising interest rates executed by the Federal Bank to combat inflation are also impacting consumers’ ability to purchase more fuel-efficient vehicles and buy homes. The cost of shelter (rent, housing, household insurance, etc.) rose an additional 6.7% in September, making housing 32.1% more expensive nationally than this time last year. Overall, inflation increased by an additional 0.4% from August to September. The Federal Bureau of Labor Statistics has not published inflation data for September through October, but the data shows that even as gas and energy prices decreased, other areas of the economy continued to experience the effects of inflation.