While the price hovers around $1.75 for an average gallon of regular gasoline nationwide, it has moved above $5.00 in one part of California. And in others, the price is just below that figure.
Gasoline has moved above $5 at a station in South San Francisco. But across much of the state, the price is around $4, according to GasBuddy. As a matter of fact, among the stations nationwide with the most expensive gas, 38 of the top 50 are in California. The high prices are not concentrated in one area. In Los Angeles and cities close by, gas prices are routinely above $3.80. Prices are also that high around San Jose and San Diego. The common thread across these pockets of high gas prices is that almost all are in big cities.
One reason gas prices are so high in parts of California is that the state has the highest average price among all states, with the exception of Hawaii. California’s average price is $2.44 per gallon. In contrast, the state with the lowest gas price is Arizona at $1.54.
As has always been the case, the primary component in the price of gas is oil prices. While it has recently recovered to $34 per barrel, the average price was below $30 less than a month ago. Changes in supply from the Middle East, Russia, Mexico and Venezuela could move prices up or down. Iran has started pumping oil. The plans of Saudi Arabia continue to hover over the market, and that probably will not change. A year ago, the price was nearly $65 a barrel.
Supply is not the only reason the price of oil has jumped up and down but still is at extremely low levels. China’s economy has started to slow, based on PMI data and other signals, which include hundreds of thousands of layoffs at some of its state-owned companies. The U.S. economy grew at only 1% in the fourth quarter of last year. There is anxiety 2016 gross domestic product will be little better than 2% as corporate earnings slide.
Proximity to oil refineries is also a factor in gas prices. The average price in states near the huge refineries south of Houston and on the Gulf of Mexico, which itself is dotted by deepwater oil drilling platforms, are some of the lowest in the nation.
Gasoline taxes by state are another factor. The average nationwide is $0.48 per gallon, according to the American Petroleum Institute. California has the fifth highest gas tax in the United States at $0.59 a gallon, which is among the reasons that gas prices are so high across the state. Residents of California face gas prices at the high end of the national average, if only for that reason.
24/7 Wall St. recently analyzed states with the highest and lowest gas taxes.
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