Even as Californians kept getting reminders of the volatile nature of their energy supply, the Middle-Class Tax Rebate stimulus checks kept rolling out and reaching millions of homes. Shutdowns of several oil refineries sent prices soaring in the first weeks of October and touched an all-time high of over $8 a gallon in areas of Los Angeles.
At least five oil refineries faced maintenance-linked stoppages and slowdowns. This limited the supply of the state’s special blend of gasoline that is produced under state laws to reduce pollution.
Unlike the national spike in the cost of gasoline this summer, which was driven by high international prices and a surge in demand, the recent surge in prices in California and the West Coast is confined to this region. It again underscores the fragility of the energy market in the state which is undergoing a transitional phase.
With prices almost double the national average and topping records across, the stimulus check announced by Gavin Newsom to support the low and middle-income sector of the population assumes importance.
Gasoline Prices The Bane Of The Low And Middle-Class Californians
Last week, Gov. Newsom jump-started the state’s shift to a cheaper, winter blend gasoline as a response to the sharp rise in fuel costs. At the rate the prices have risen, even the third state stimulus check amount would not be enough for low and moderate-income groups, especially since Americans‘ fuel consumption is a massive 40 to 65 gallons every month when calculated for working Americans.
Naturally, gasoline expenses are the single biggest household expense for Americans, with household expenses of nearly $500 a month.
The first two rounds of support by California, the Golden State Stimulus checks, came at a time when gasoline prices were way down. In 2020 and 2021 the average was around $3.5 to the gallon, half the present prices. An average household has ended up paying almost $250 more per month on gasoline alone.
Gov. Newsom has placed the blame for rising costs in California at the feet of oil companies. In a social media post, he said that oil companies continue to ratchet up prices without any justification or explanation for the move. The Energy Commission of California has also questioned the oil industry executives over how they have allowed supply levels to drop so low even though in previous years, refineries had managed to make provision for such maintenance issues.
Governor Newsom Blames Refineries For Not Planning In Advance
The governor also referred to the stark difference in gas prices between the state and the rest of the country. Present prices of gasoline in California hovered between $7.5 and $8 per gallon, almost double the national average of a little less than $4 per gallon.
He made a direct attack on the oil majors and said that such a high degree of diversion from the national average was unprecedented and accused the oil companies of ripping off the residents of California.
Severin Borenstein of UC Berkeley‘s Energy Institute said that even as California phases out gasoline, fewer and fewer refineries in the state will make the blend allowed here. And with a lesser number of refineries making the special blend, even if anyone refinery stops production for some reason, the state is in for a massive price stock.
President Biden also had taken up issues with the energy companies and accused them of profiteering on consumers during troubled times. He released oil from strategic reserves and encouraged Saudi Arabia to ramp up oil production.
With the streak of declines having stretched to 98 days, the White House has regularly pointed at the slide in prices and the saving that it will offer to car owners.
The high oil prices are not the fault of the Biden administration. But the President realizes that if gas prices are back to $4.5 and above on Election Day or the days preceding it, the Democratic Party is in trouble in the midterms and stands to lose both the Senate and the House.
How Much Is The California Inflation Relief Stimulus Check
California is sending relief payments directly to millions of residents to help with record gas prices and rising costs in other sectors. The payments started going out on October 7 and started reaching the bank accounts of millions.
The payments range from $200 to $1,050 and the payments depend on income, filing status, and the inclusion of dependents in the income tax returns.
Around 18 million stimulus checks will go out over the next few months culminating on January 14, 2023. Around 23 million Californians are expected to benefit from this cash payout.
Governor Newsom has included the middle class in the list of beneficiaries who will get the third round of stimulus checks from the state, aptly named the Middle-Class Cash Back, residents with an individual state Adjusted Gross Income of $250,000 and a joint AGI of $500,000 for 2020 qualify for the payment that has been divided into three tiers.
To be eligible, you need to have filed your state income tax returns for 2020 by October 15, 2021. The only exception is for people who were waiting for an Individual Taxpayer Identification Number on that date. But they should have filed their return by February 15, 2022.
People who did not file an income tax return for 2020 for the state of California will be left out of this benefit. This includes disabled people and senior citizens.
People who were claimed as dependents for tax purposes in 2020 will also be left out of the Middle-Class Cash rebate stimulus check.
The stimulus checks will also not benefit domestic or married partners who have an adjusted gross income of $500,000 if filing jointly or $250,000 as individual filers.
You also need to be a resident of California for at least 6 months in 2020 and also reside in California on the date the payment is issued by the Franchise Tax Board of California.
Undocumented Californians who have a valid taxpayer number or a Social Security number and who have filed their complete 2020 tax returns and meet tick all other eligibility boxes can receive the stimulus check.
You will not have to send any additional papers or forms or fill out any online or paper documents to receive your stimulus checks.
