Gas prices continue decline, still much higher than last year
(The Center Square) – Gas prices have continued a steady decline in recent weeks, coming down from record-high gas prices this summer, but the Congressional Budget Office says natural gas prices may see an increase from the recently passed Inflation Reduction Act.
According to AAA, the current national average price for a gallon of regular gasoline is $3.78, down from $4.08 a month ago and down significantly from earlier this summer when prices surpassed $5 per gallon. Prices have dropped about a nickel in the past week.
Biden touted the drop in prices over Labor Day weekend, when many Americans travel for the long weekend.
“Folks, gas prices continue to drop as they have every day this summer,” Biden said. “As of today, prices are down by more than $1.20 per gallon over the past 82 days.”
The current average, though, is still much higher than the $3.19 per gallon average at the same time last year.
Republicans have blasted the Biden administration, pointing out prices are much higher than when he took office and arguing that the recent “spending spree” of trillions of dollars across multiple bills will hike prices through inflation.
Inflation has grown at the fastest pace in more than four decades.
“It means hardworking Americans – who are already struggling to afford their grocery [and] energy bills – will be forced to pay more,” U.S. Rep. Cathy McMorris Rodgers, R-Wash., said.
Republican lawmakers also pointed to a natural gas methane emissions fee included in the recently passed Inflation Reduction Act, saying those costs will be passed on to consumers via higher energy bills.
They pointed to the Congressional Budget Office’s analysis of the Inflation Reduction Act, which treats the fee as a tax and says “those cost increases are passed along to consumers of natural gas in the form of higher prices.”
“A charge for methane emissions decreases the amount of methane emitted and increases the cost of producing natural gas, which raises its price and lowers its total output,” the CBO report said. “Studies of the oil and gas industry have found that companies have low-cost options for reducing a large percentage of methane emissions, but abatement costs increase steeply once those options are exhausted. Because end users of natural gas are not as sensitive to price increases as its suppliers are, much of the cost for abatement is expected to be passed through to end users as a price increase.
“That price increase will represent a smaller percentage of the total bill for users who pay higher markups for natural gas, such as residential users, than for those that pay lower markups, such as companies that produce electric power,” the report added.