California has long been known as the country’s priciest place to fill up your tank, but these days the Golden State is “completely out of whack.”
As gas prices plummeted around the nation in recent weeks, California’s price at the pump has rebounded with a vengeance to an average of $5.58 a gallon.
That’s $1.89 more than the national average — the highest price gap in at least 22 years, according to a Bay Area News Group analysis of AAA data.
While Russia’s invasion of Ukraine drove prices higher around the world, California’s perplexing price swing is largely due to the local oil industry, experts say, which is putting the state on another planet when it comes to gas.
OAKLAND, CALIFORNIA – SEPTEMBER 23: Sonya Khvann, of Oakland, fills up her SUV at a 76 gas station in Alameda, Calif., on Friday, Sept. 23, 2022. The premium gas at this station is $6.29 per gallon while the Chevron gas station across the street cost $6.59. (Ray Chavez/Bay Area News Group)
“The commodity price of gasoline in California has gotten completely out of whack,” said Severin Borenstein an energy economist at UC Berkeley. “If this holds, we’re just starting to see the increase. It’s going to go up even more.”
Average prices in the Bay Area are even higher, with San Francisco drivers closing in on $6 a gallon, and many commuters are desperately waiting for gas rebate checks from the state, which are set to hit most bank accounts in October. Although fuel costs are still down from their peak in June, drivers are contending with nearly seven months of average prices topping $5 a gallon.
“It’s unfair,” said Sonya Khvann, a single mother of three, who was pumping gas in Alameda on Friday. She’s spends about $800 a month on fuel shuttling around her children. “It’s not like you can change your career overnight,” said Khvann, a part-time real estate agent. “Not everyone can be in tech.”
OAKLAND, CALIFORNIA – SEPTEMBER 23: Chris Perez, of Alameda, fills a portable gas container in addition to his truck at a 76 gas station in Alameda, Calif., on Friday, Sept. 23, 2022. The premium gas at this station is $6.29 per gallon while the Chevron gas station across the street is cost $6.59. (Ray Chavez/Bay Area News Group)
Much of California’s high gasoline costs are explainable. The state’s 54-cent gasoline excise tax is among the highest in the country — only Pennsylvania’s is higher. There are also stricter environmental regulations and special fuel blends that prevent rampant smog from accumulating in cities. Altogether these factors tack on roughly $1.20 to California’s gas prices.
But the widening gap between what everyone from San Jose to Los Angeles is paying compared to the rest of the country is due to the concentrated nature of California’s oil refineries. Due to the state’s special gas blend, California is often termed a “fuel island” because nearly all gas sold in the state is produced locally by a handful of companies, including Chevron, Marathon Petroleum and …read more
Source:: The Mercury News – Latest News
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