Californians have seen gasoline prices skyrocket in recent weeks, culminating in back-to-back records on Monday and Tuesday.
According to AAA, California’s average gas price is $6.42 a gallon – far above the national average of $3.86
Other states like Florida, Georgia and Texas have not seen a significant gas price increase. Prices there have stayed close to the national average.
So, why are California gas prices increasing disproportionately?
Patrick De Haan, the head of Petroleum Analysis at Gas Buddy, attributes the rising gasoline prices in the Golden State to high gas taxes and limited supply from oil refineries, among other reasons.
“When one little thing goes wrong, it can take a refinery offline for several days,” De Haan said. “It’s similar to encountering a flat tire or a rock in your windshield during a road trip. These can be minor issues but can take days to resolve themselves.”
While some refineries are undergoing scheduled maintenance – which is typical for this time of the year as the summer demand for gas decreases – others have seen significant, unexpected issues.
That means not enough gasoline is being produced to keep up with demand, resulting in California’s gasoline inventory being at its lowest in a decade, De Haan said.
As of June, California had 13 operational refineries and two idle ones, he said.
The rise in gas prices comes at a time when we normally see prices drop. Traditionally, Californians would see cheaper gas transitioning into fall and winter.
“Gasoline demand is lower in the fall, winter and into the early spring season,” De Haan said. The winter blend of gasoline is also cheaper to produce.
De Haan said refinery issues could change that outlook this year, but if everything goes according to plan, relief should be coming soon.
“Once these refinery issues are addressed within the next couple of weeks, I expect California prices to go back under $6, if not back to what they were before the price increase,” De Haan said. “We can see the California statewide average back in the low $5 range, which is a dollar per gallon lower than where prices stand today, potentially by the end of November if everything goes well.”
Recently, Gov. Gavin Newsom authorized the California Air Resources Board to release the winter blend of gasoline before its Oct. 31 scheduled rollout, increasing inventory and lowering prices.
“That is likely one of the reasons why gas prices at the wholesale level have shown some signs of it starting to come back down,” De Haan said.
The winter blend does contribute to a slight increase in air pollution, but the components that go into the mixture are usually more accessible and cheaper, he added.
In the meantime, De Haan encouraged drivers to shop around for gasoline by using apps like GasBuddy, Waze, or Google Maps to find the cheapest gas in their area. People can also sign up for rewards programs that offer deals on gasoline. Changes in your driving habits can also boost fuel economy.
