A dollar won’t take you very far in California these days.
Today, the state has an average gas price of $4.18 per gallon, more than $1.50 higher than the $2.64 per gallon average from every other state, according to the American Automobile Association.
California has the highest gas taxes in the nation at an average of 57.8 cents a gallon—more than one-eighth of the total price of the gas, the AAA says. The tax was raised most recently by 5.6 cents per gallon July 1. California imposed a 12 cents-a-gallon tax increase in November 2017.
The last time gasoline cost more than $4 a gallon nationwide was in 2008, during the Great Recession, according to AAA’s statistics. The California price increase comes even as prices fall across the rest of the country in anticipation of lower fuel use in fall and winter.
Every fall, refineries switch to gasoline formulas better suited to winter and retrofit their infrastructure, AAA spokesman Devin Gladden said. In the past few weeks, seven of California’s 25 refineries experienced outages in production at the same time.
“The challenge is that there’s a special formula of blended gasoline needed in particular places in California, and when there’s a supply problem, it can be difficult to import the special formula into those places,” Gladden said. “That can cause prices to spike.”
According to the Los Angeles Times, California gasoline costs extra primarily because of state government regulations. The state demands that companies create a fuel mix that reduces pollution, and that formula costs more money and effort to make than normal gasoline.
The high cost doesn’t only burden motorists, it also drives away refineries. Because many companies won’t invest in the expensive infrastructure required to produce the California gas mix, they leave the state.
According to The Fresno Bee, 55 refineries produced fuel in California in 1983. Today, only half that many, 27, remain. As a result, the fewer firms that remain can charge higher prices.
California also lacks interstate pipelines, according to the Los Angeles Times. During shortages, only trucks and ships can deliver gasoline. Both of those methods cost more than using pipelines.
All of that means that, for more than 24 million California licensed motorists, travel will be much more costly. If they buy as much gasoline as the average American, they will spend $15 more on gas every month than those living in other states.
Gas prices won’t remain above $4 per gallon for long, however, the AAA’s Gladden said. The refineries soon will be producing at ordinary capacity.
The problems with the plants “have mainly ended last week,” he said. “Prices should stabilize toward the end of this week.”
Even so, California still will have the highest gas prices in the country.
