The monthly energy updates have been published for May 2022 fuel prices (data from GasBuddy.com) and electricity prices and natural gas prices for March 2022 (price data from the U.S. Energy Information Agency).
“If you got it, a truck brought it,” is what you may often hear from long haul truck drivers who deliver all of the goods you receive. Not just the fuel at the gas station, but the food we eat, or increasingly, the Amazon order that might arrive the same day you ordered it. Well, all of it is coming at a premium these days. Skyrocketing gasoline and diesel prices have doubled the price on many weekly and monthly staples.
As the cost of diesel for truckers trickles down to consumers, the impact is real, given that more than 70% of goods shipped in the U.S. are transported by trucks. Even items from overseas are going to make the final mile by truck. Everything, from what we wear to what we look around and see, is delivered by truck.
As we have been reporting over the past many months and as the data reveals, energy costs continued rising across the board. Compared to a year ago, the price gap between California and the rest of the states has risen significantly. Given the intense inflationary period – inflation now officially at a forty-year high – California’s regulations continue to compound prices paid in the State on all goods as compared to the rest of the country.
Again, the most impactful for Californians is gasoline and diesel, as they both have reached new highs. As we are going to print with this article, June 5 averaged $6.326 in California compared to $4.848 in the U.S. Within the state, average prices ranged from $6.062 in Imperial County to $7.147 in Mono County. And in Mendocino, you can buy gasoline for $10 per gallon!
Gasoline Demand Destruction
California Gasoline Price in May 2022: The average price per gallon in May was $6.04, representing a $1.60 price per gallon above the U.S. average of $4.44 per gallon.
Gasoline prices at all-time highs may be starting to put a dent on demand at the pump. In fact, gasoline demand destruction may have already begun. Since the beginning of March, U.S. gasoline consumption is 6% lower than the corresponding period in 2019, pre-pandemic.
With more than a dozen states already above $5/gallon, the U.S. Energy Information Administration (EIA) has been tracking a slight dip in gasoline demand when compared to 2021. According to the EIA, gasoline demand over the last month is about 2.0% less than this time last year. As prices continue to rise, there is a pattern that suggests that the demand will continue to fall off compared to 2021.
The higher prices at the pump corollate with higher costs for crude oil. The problem is exacerbated by limited refineries in the U.S. With West Texas Intermediate crude futures above $120 per barrel in early June, and Brent crude trading above $123 per barrel, analysts are predicting that if we broach $125/barrel on crude oil, and stay there for a while, consumers will change their behavior and it will hurt local economies.
Given our ongoing needs for the delivery of – well – everything essential (produce, paper goods, medicine, etc.), domestic oil production from states like California, will always deliver the most socially friendly and environmentally benign barrel of oil on the planet.
California Prices for Gasoline and Diesel in May are Highest in the Nation
Gasoline
- The May average price per gallon of regular gasoline continued its dramatic rise. The average price for regular gasoline ranged from $1.49 in the Central Valley Region (average May price of $5.93) to $1.73 in the Bay Area Region (average May price of $6.17).
Diesel
- The May average price per gallon of diesel in California rose 24 cents from April to $6.60. The California premium above the average for the U.S. other than California ($5.48) eased to $1.11, a 20.3% difference. While fuels, in general, are now contributing heavily to rising inflation, diesel as the primary transportation fuel, in particular, gets reflected quickly into the costs of food and other basic consumer goods.
California Residential Electricity Prices for March 2022 Remain Highest in the U.S.
- For the 12 months ended March 2022, the average annual residential electricity bill in California was $1,523, or 53.2% higher ($529) than the comparable bill in 2010 (the year the AB 32 implementation began with the Early Action items). In this same period, the average U.S. (less CA) electricity bill for all the other states grew only 9.7% ($132).
California Commercial (Highest in the U.S.) and Industrial Electricity Prices (3rd Highest in the U.S.) in March 2022
- California’s average Commercial Price for the 12 months ended March 2022 was 19.64 cents/kWh, 84.9% higher than the U.S. average of 10.62 cents/kWh for all states other than California. California’s commercial prices again were the highest among the contiguous states.
- California’s average Industrial Price for the 12 months ended March 2022 was 15.38 cents/kWh, 123.2% higher than the US average of 6.89 cents/kWh for all states other than California. California’s industrial prices again were the 3rd highest among the contiguous states.
California Natural Gas Prices in March 2022
Average prices ($ per thousand cubic feet) for the 12 months ended March 2022 and changes from the previous 12-month period for each end-user:
