After spiking painfully high during the winter, the price of natural gas has plunged by more than one-third over the past two months in the Bay Area — putting it below the level of one year ago, according to the latest consumer price index for the region.
Food prices, while still higher than this time last year, also began to edge down in the March-April period, declining for the first time since February 2021.
While overall prices still climbed in the Bay Area during the past two months, growth has continued to slow since December of last year, after consistent monthly increases of over 5% for nearly all of 2021.
The U.S. Bureau of Labor Statistics, which publishes the consumer price index, includes Alameda, Contra Costa, Marin, San Francisco and San Mateo counties in its analysis of prices in the San Francisco metro area.
Natural gas prices dropped 36% in the March-April period — an abrupt turnaround from the 15% increase during December and January and subsequent 18% increase during January and February. Many Pacific Gas & Electric Co. customers reported they were shocked to receive enormous energy bills, with some saying they could not afford to heat their homes.
Utility companies blamed factors they said were out of their control, like storage limits and problems with a critical pipeline in Texas. But Gov. Gavin Newsom urged the Federal Energy Regulatory Commission to investigate whether “market manipulation” and “anticompetitive behavior” drove the elevated prices.
Year-over-year, Bay Area natural gas prices were down 16%, the first year-over-year price decrease since September 2019.
Prices for gasoline in the Bay Area rose 4.2% over March and April, but are down about 14% year-over-year. Last spring, gas prices spiked as Russia invaded Ukraine, causing a significant impact on the global crude oil market.
Now, concerns about a recession and rising interest rates are pushing oil prices down, according to AAA, along with seasonal demand changes.
“The oil market volatility is leading to lower prices,” Andrew Gross, an AAA spokesperson, said in a blog post. “And we are also in a pre-summer driving season lull regarding domestic demand. These two factors should keep pump prices drifting lower for now.”
Overall energy prices in the Bay Area were down 7.9% from last year, largely because of the decrease in gasoline prices, according to Nicholas Chung, an economist with the U.S. Bureau of Labor Statistics.
Prices for electricity in the Bay Area rose over March and April by 4.7% and over the last year by 9.5%, though the increases were offset by natural gas price decreases.
Nationally, natural gas prices were down 2.1% year-over-year, while electricity prices were up 8.4%.
Food prices in the Bay Area decreased 0.7% over March and April, providing slight relief for consumers at the grocery store from costs that began soaring last year due to inflation. However, prices are still up 6.1% from last year.
Also down during the past two months were costs for apparel, with a 3.7% decrease.
Prices for shelter, which includes rent and the equivalent of what homeowners would be paying in rent if they rented their own home, were up 1.1% over March and April and 5.5% year-over-year in the Bay Area. Prices for used cars also saw an increase — up 2.4% over the last two months, though down 5.2% year-over-year.
Overall prices in the Bay Area have been increasing monthly since December. But the increases have slowed since February, when prices were up 1.8% over two months, compared with April’s 0.4%. April also saw the Bay Area’s lowest overall year-over-year price increase since December 2021 at 4.2%.
The Bay Area’s price changes are also largely in line with that of the nation — nationally, prices climbed 4.9% since last year, the smallest 12-month increase since April 2021.
Prices for all items without energy or food, which can be volatile, were up 0.8% over March and April and 4.7% year-over-year. Unlike the price index including food and energy, the prices without food and energy have not seen a significant slowdown in their rate of increase.
Reach Danielle Echeverria: danielle.echeverria@sfchronicle.com; Twitter: @DanielleEchev
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Natural gas prices have plunged in the Bay Area. Here's how food and other costs have changed - San Francisco Chronicle
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