California gas prices are down nearly $1 since peaking in June

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ByJ.R. Stone via KGO logo
Monday, August 8, 2022
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California sees a dip in gas prices since peaking in June but could this be a warning sign the U.S. economy is weakening?

SAN FRANCISCO (KGO) -- Gas prices in California have dropped at least 98 cents since peaking in June.

"So inflation remains a very big concern but certainly having gas prices coming down will help," says Severin Borenstein of UC Berkeley's Energy Institute. Borenstein is urging caution though when it comes to your excitement over that drop.

"I think we should be a bit concerned about the cause of course. Everybody likes paying less at the gas pump, but we should be a bit worried about the cause because it is probably substantially driven by weakening in the U.S. economy," says Borenstein.

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Drivers though...

"Since it's going down, I'm driving a little more," says Corey Wong of Millbrae.

While this drop in gas prices is likely to help with inflation. Many are wondering if the Inflation Reduction Act will do the same.

"I do think that the Inflation Reduction Act might help a bit but what we don't know, what we do know is that it mostly won't hurt," said Ann Harrison who is Dean of the Haas School of Business at UC Berkeley. Harrison says that despite the name Inflation Reduction Act, the bill actually hits hardest on climate change and clean energy initiatives.

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"It's going to massively help reverse climate change in the US. It's going to make us a leader in the fight against global warming. It could help reduce inflation but it certainly isn't going to hurt," says Harrison.

As for the pain at the pump, or recent easing of the pain at the pump,

"It's pretty clear that we're going to see a bit more of a drop because the price of crude oil came down substantially in the last few days and that hasn't fed through yet, so unless the price of crude oil suddenly rebounds, I think we will see a bit more of a drop. Beyond that it's always hard to tell," says Borenstein.

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