Gas Prices Near $5 in California

Energy

Published: July 27, 2023 7:30 am

It has been over a year since U.S. gasoline prices reached $5 for the first time, based on a gallon of regular. There was worry that if the price stayed so high, it would cripple the consumer economy. However, the spike in oil prices that affected gas disappeared, and crude has traded in a narrow range around $80 since last November. There is one state where gas prices are extraordinarily high. In California, that is $4.87 a gallon. (These states have the highest and lowest gas taxes.)
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The current average price for a gallon of regular nationwide is $3.69, according to AAA. That has barely changed from a month ago when the figure was $3.57. A year ago, the price was $4.33.

California has about 12% of the nation’s population. In theory, at least, the high price of gas there should undercut consumer spending. Due to California’s population size, that should weigh on the national economy ever so slightly.

The gas price in California is affected by oil prices. There are two other major factors in price. The first is transportation. California is fairly far away from the large refineries south of Texas on the Gulf Coast.

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The other factor is state gas taxes. In California, they are the highest in the country at $0.8655 a gallon. The national average is $0.5709.

Due to the state tax issue, California is likely to have the highest gas prices no matter in which direction oil trades.

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