The price of gasoline continues to fall steadily, easing pressure on American consumers as the cost of filling a tank continued to tumble from record levels reached earlier in the summer.
Gas prices fell 10.6 percent in August, which helped moderate still-sky-high inflation, Tuesday’s Consumer Price Index report showed.
The energy index, which tracks gasoline and electricity among other energy sources, dropped 5 percent last month, as electricity and natural gas prices rose.
After peaking at $5.02 in June, gasoline prices have dropped for 91 straight days, and the national average stood at just over $3.70 a gallon on Tuesday, data from AAA show. But analysts point to a few reasons this streak of declines is unlikely to continue.
Because they’re determined by oil prices, gasoline prices are also susceptible to a wide range of challenges, like hurricanes that knock out drilling in the Gulf of Mexico and efforts to punish Russia for its invasion of Ukraine by curbing its ability to sell crude on the global market.
While gas prices are down, the overall energy index still remains up 23.8 percent over the 12 months that ended in August. Electricity prices alone jumped 15.8 percent, representing the largest 12-month increase since August 1981, the inflation report said. The jump in electricity prices is largely attributable to the high cost of natural gas, said Laura Rosner-Warburton, an economist at MacroPolicy Perspectives.
As winter approaches, other fuel prices could influence inflation data. The cost of heating a home with natural gas, the most common source of home-heating fuel in the United States, is expected to jump more than 25 percent from last year, to $952 for the six months from October through March, according to the National Energy Assistance Directors Association.
“You would expect that a hard winter could create a significant increase in demand in price of natural gas,” said Bryan Benoit, U.S. national managing partner of energy at Grant Thornton. “And then of course all of this is further exacerbated by what’s going on with the war in the Ukraine.”
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