Low gas prices slow Alaska inflation growth

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first_imgAs oil prices have dropped and the state has struggled to pay its bills, Alaskans saw one benefit. The cost of living in Anchorage increased by the smallest amount in nearly three decades. Low gas prices had a powerful effect on inflation in the state.Listen nowRichard Carrillo, of Juneau, gases up his suburban on July 7, 2016, in Juneau, Alaska. State economists said low energy prices caused a slower growth of inflation in Alaska last year. (Photo by Rashah McChesney, KTOO – Juneau)At a Tesoro near downtown Juneau, Tim Young makes a quick stop to put a few dollars’ worth of gas in his SUV.  He said when he pays less to fills up his tank, it makes it easier to afford other essentials, like food and rent.“When it goes down, it helps tremendously,” Young said.The price on this day: $2.78Damien Thorne pulls up in Jeep Liberty, which he describes as getting less than stellar gas mileage.“I gotta fill it up at least two times a week and spending about 50 bucks every time,” Thorne said.When gas prices dropped, Thorne said he and his wife noticed the extra money in their monthly budget. But, he’s not sure he’d trade higher energy prices and a balanced state budget, for the money he saves when gas is cheap.“I would just rather just have just regular gas prices you know?” Thorne said.Thorne, who spent time living in Ohio, said a regular gas price for him is $1.65 a gallon. Still, Thorne said a high price at the pump wouldn’t stop him from buying gas, just like the high cost of living in Alaska wouldn’t stop him from living in Juneau.“It’s gas, so we need it. I’m going to get it if it’s $4 a gallon, ‘cause I got to get around. So it’s just, yeah, supply and demand,” he said.Alyssa Rodrigues is an economist with the state’s Department of Labor.She said the average cost of living — that’s the amount of money it takes for Alaskans to buy milk, put fuel in their cars and pay rent or for healthcare — still went up last year. But that increase was slowed significantly by a 10 percent decline in energy prices in Anchorage 2015.“And because, energy factors into other things that we spend our money on and one big piece is transportation, it brought the price of transportation down and we spend a lot of our income on transportation,” Rodrigues said.Anchorage is the only city in the state where inflation is measured. Last year, Anchorage’s inflation rate went up half a percent, according to Department of Labor data. That’s the lowest recorded increase in 27 years.This isn’t the first time that energy prices have dropped. Rodrigues said they’ve been dropping for the last four years – though last year’s was the largest drop in nearly a decade.And, in Alaska’s off-the-road system communities, energy costs dropped, but they’re still extreme.“It might have one effect on Anchorage but when you look at a place like Arctic Village or something that has to have all of their fuel flown in, obviously that cost is going to be magnified because you have additional costs for the fuel just to get the fuel to you,” Rodrigues said.In Arctic Village, residents are paying $10 a gallon at the pump.last_img

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