Grace, from your Investor Relations team, provides an update on California's gas stimulus.
With gas prices at record highs and inflation eating into the wallets of consumers around the country, California Governor Gavin Newsom announced on Monday that the state will be taking a drastic step to curb the effects of rising prices.
Golden state lawmakers announced that 23 million residents will be eligible to receive payments up to $1,050 in an attempt to abade rising gas prices. The initiative is part of the state’s $17 billion inflation relief package and funding will come from the state’s record-setting $97 billion budget surplus.
This stimulus comes as gas in California is averaging over $6 a gallon - 30% higher than the national average. Residents may not receive the rebate until early next year, so although it’s not an immediate fix, it is a promising signal to consumers in need.
Despite providing short term reprieve, the move to put money back into the hands of consumers without increasing the supply may be inflationary. It’s certainly a balancing act – lawmakers must determine how to offer a necessary relief to those feeling the pressure of high prices without going too far and making the problem worse. We’ll see how it goes.
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