California recently has taken the largest hit in the sharp increase in gasoline prices. The average price of a gallon of regular in the nation’s largest state sits at $3.99. However, in some of the state’s largest cities, the situation is much worse.

The area around San Francisco has been hit particularly hard. The price within the city itself is $4.06, according to Gas Buddy. Not far away is Santa Barbara, the city with the highest price in the state at $4.11. The price in nearby San Jose is $3.99. Across the bay from San Francisco, in Oakland, the price is $3.97.

The area around Los Angeles has not been spared. The price within the city is $4.05. In Riverside, the price is just over $4.00, and in Ventura it is $4.06.

The other city in the state with an average price of regular in this range is San Diego, at just above $4 a gallon.

California’s largest cities could be the best place to test whether gas prices can begin to badly hurt the economy. The areas around San Francisco, San Diego and Los Angeles are home to millions of people. Coupled with high gas prices, these areas also have expensive real estate and high costs of living. Perhaps the only mitigating factor is that some also have many households with high median incomes.

The economic theory about rising gas prices is that the trend kills consumer spending. People only have so much money, obviously. Commuters, which number fairly high among the populations of California’s cities, struggle as an increasingly larger portion of their weekly incomes go toward fueling their vehicles. Eventually their finances become pinched and their spending on almost everything else drops.

If California’s economy does begin to suffer from high gasoline prices, several other regions are not far behind. In New York, Miami and other large cities, the average price for a gallon of regular has passed above $3.75 and shows little evidence of moderating. The “California gas problem” has already started to spread aggressively.

It doesn’t help that total gasoline inventories have decreased, even with refineries running at near full capacity. One may also wonder why so much oil is stockpiled in the U.S. Strategic Reserve.

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