Energy Economy

Gas Still Over $4 in California

California continues to suffer some of the highest gasoline prices in the United States. The average price of a gallon of regular in the nation’s largest state sits at $4.09, second only to Hawaii’s $4.36. However, in some of California’s largest cities, the situation is much worse.

The area around San Francisco has been hit particularly hard. The price within the city itself is $4.24, according to GasBuddy. Not far away is Santa Barbara, where a gallon of regular costs $4.10. The price in nearby San Jose is $4.11. Across the bay from San Francisco, in Oakland, the price is $4.12.

The area around Los Angeles has not been spared. The price within the city is $4.13. In Ventura, the price is $4.14, and in Riverside it is $4.07.

And down in San Diego, the average price of regular is $4.09 a gallon.

California’s largest cities could provide some of the best evidence for whether high gas prices can badly hurt the economy. The areas around San Francisco, San Diego and Los Angeles are home to millions of people. Coupled with high gas prices, these areas also have expensive real estate and high costs of living. Perhaps the only mitigating factor is that some also have many households with high median incomes.

The prevalent theory about rising gas prices is that they reduce overall consumer spending. People only have so much money. Commuters, of which there are many among the populations of California’s cities, struggle as an increasingly larger portion of their weekly incomes go toward fueling their vehicles. Eventually their finances become pinched and their spending on almost everything else drops.

California’s economy is not alone in suffering from high gasoline prices, as several other regions are not far behind. In New York, Chicago and other large cities, the average price for a gallon of regular is still above $3.93 and shows little evidence of moderating much. The “California gas problem” may already have started to spread.

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