Energy

Gas Price Still Above $3 in California

California suffers from a perfect storm of conditions that keep gasoline prices high. While most states have prices of an average gallon of regular below $2.50, California’s is $3.21. In some of its cities, the figure is much higher.

Nationwide, according to GasBuddy, the price has been fairly steady for a month, just above $2.42. That is well below $3.51 a year ago, but above prices since earlier in the year. As crude has jumped up in the past two months, so have gas prices. But the trend of oil prices has started down, and with this the promise that, in some states, gas prices will fall below $2. The price is already down to $2.09 in South Carolina.

Among the primary causes of the high price in the largest state in the nation by population is high “motor fuel taxes,” as the American Petroleum Institute calls them. The figure is $0.6379 in California. These taxes are, by contrast, $0.297 in oil-rich Alaska and $0.3515 in South Carolina. And South Carolina has a large number of refineries, which is another reason its average gas price is so low.

California drivers have had poor luck as two large refineries have closed. The first is Tesoro refinery in Martinez, Calif., which has been shut down due to a strike by the United Steel Workers. The second is the Exxon Mobil Corp. (NYSE: XOM) refinery in Torrance, which was closed due to a fire.

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California has some cities where prices are well above $3, and for the most part these are the state’s largest cities. The price is $3.36 in San Francisco, $3.26 in Los Angeles and $3.24 in San Diego.

Even if the price of oil drops back toward $40 a barrel, California’s gas price will remain the highest in the country. Too many other factors are against it.

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1 https://www.fdic.gov/national-rates-and-rate-caps

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