Over 20 states have given the go-ahead to send stimulus checks to their residents in 2022 even as the federal payments dried up at the end of 2021. With inflation touching record levels, the states were forced to intervene to help out citizens who have been affected by rising prices that have almost doubled from pre-pandemic levels in some cases.
The rise in prices has been across the spectrum with the price of everything from gasoline to groceries on a relentless rise for close to a year. The inflation rate crossed the 8% mark in the first quarter of 2022 and has continued to rise, reaching 9.1% in June 2022. It is the highest since November 1981. Though year-on-year inflation came down a bit, it has continued to stay above the 8% mark.
Starting with states like Maine and New Mexico, the stimulus checks have continued into the festive season with the biggest of them all from the Golden State.
Californians have had it tough in 2022 as prices of gasoline in the state are the highest in the country thanks to the quality of the oil and higher taxes. And even as residents continued to be reminded of the unpredictable nature of the prices of fuel in their state, the latest Middle-Class stimulus checks are being sent out and being credited to millions of individual and joint accounts.
The prices of gas in California were further affected by the shutdown of numerous oil refineries, which caused prices to soar further to touch a record high of more than $8 per gallon in cities such as Los Angeles.
Around 5 oil refineries complained of maintenance-linked disruption and slowdown in their work schedule. This severely affected the flow of the special blend from refineries that California produces under strict state environmental laws to bring down pollution.
The national increase in the cost of gas in 2022 was led by external factors like high world prices, a post-pandemic surge in demand, and the war in Europe. Governor Gavin Newsom stepped in to announce relief measures for the low and middle-income section of the population.
Newsom had initially proposed a gas rebate card that would give $400 assistance to residents per vehicle. A maximum of two cards were planned for each family but Democratic legislators later convinced Newsom to go for a third stimulus check.
While the first two rounds of California stimulus checks were to cover the post-pandemic recovery record and help out people affected severely by the pandemic.
As prices spiked to almost twice the American average and broke previous records, the stimulus check in the form of a tax rebate was announced by Gov. Newsom. Support too low and middle-income households has assumed utmost importance under the circumstances.
Gasoline Prices Continue To Assail Low And Moderate-Income Families
Recently Gavin Newsom gave a jump start to California’s shift to a cheaper blend of gasoline to counter the sharp spike in gas prices. At the alarming rate that prices of gasoline have risen in California, even the 3rd stimulus check payment would be insufficient for low-income groups, especially since fuel consumption is a massive 40-65 gallons a month for working residents.
Gasoline thus constitutes the single largest American household expense, reaching up to $500 per month in most cases. The first couple of rounds of support by the state, the two rounds of the Golden State stimulus checks arrived at a time when prices of gas were way down. The state average price of gasoline in 2020 and 2021 was around $3.5 a gallon, less than half the present rate in California.
For households, it works out to an added expense of around $250-$300 a month on gasoline alone. And that is just for one working member of the family.
Refineries Take Blame For Not Planning In Advance
Gov. Newsom has directly blamed the oil majors for the present situation, saying that corporate greed has been the single largest cause of the price rise. In a social media post, Newsom blamed the oil majors for the present price spike. The state’s energy commission has also blamed oil industry executives for price gouging and how they have allowed the levels to drop to such low levels even though they managed another period to continue supply at normal levels even during maintenance disruptions.
Gov. Newsom has also pointed out the sharp difference in the price of gasoline in California and other states. Present prices in the states remain closer to the $6 a gallon mark. That is way above the American average which is around $3 a gallon.
Severin Borenstein of Energy Institute, part of UC Berkeley, said that while California continues to phase out gasoline, a fewer number of refineries in California are producing the special low-polluting blend that is allowed in the state. And with the low numbers producing this blend, a disruption in any single refinery was having a detrimental effect on the overall production scenario and leading to an increase in prices, and a massive spike in prices.
President Joe Biden has taken up the issue with the oil companies and blamed them for profiteering on consumers during troubled times. He has ensured the release of oil from strategic reserves and also appealed to the oil-producing nations, including Saudi Arabia, to ramp up the production of oil.
Prices have been in a decline for the past quarter and the White House has regularly pointed at the fall in prices and the savings that it will offer to vehicle owners.
The high oil prices are not completely the fault of the federal administration with international issues such as the war in Europe and the high international prices as a result of the shortage.
The California Stimulus Check Details
California is in the final phase of sending out the third round of stimulus checks with record gasoline prices and rising prices in most sectors. The payments started going out in the first week of October and reached the accounts of millions of residents.
In the second phase, the payments are going out to people who filed on paper instead of online. Residents who failed to file their income tax returns for 2020 by the stipulated date of October 15, 2021, were not included in the list of beneficiaries.