According to AAA, California has some of the priciest gas in the US. The average cost for a gallon of regular unleaded in other parts of the country is $3.40. However, in California, it’s a whopping $4.87, the highest in any state. Many things affect gas prices. Factors like refining, taxes, distribution, marketing, and crude oil prices, as explained by the US Energy Information Administration.
Special Blend of Gasoline
In California, taxes play a significant role in why gas prices are high. California has the highest gasoline taxes in the country. They need a special kind of gas that’s cleaner and this type is more expensive to make.
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Patrick De Haan, who studies gas prices, gave a statement. He says that over the past 40 years, California has lost 66% of its refineries that make this special gas. So, with fewer refineries, there’s less of this special gas available, which adds to the cost.
California’s Refineries
California relies heavily on its own refineries to produce a unique type of fuel used in the state. Unlike many other places, California has its own unique blend of fuel. This fuel is made by 11 big refineries in the state, according to the California Energy Commission.
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This means if there’s a problem at one refinery, it can disrupt the fuel supply. This is because not many other places make the same kind of fuel. This isolated market means any outages will cause volatility in the prices of the fuel.
Going Green
Prices have been high in California partly because the state has made it challenging for oil refineries to grow. California doesn’t welcome expansions or investments in the oil industry. Instead, it wants to switch to electric cars. By 2035, California wants to stop selling new gas-powered cars and use cleaner vehicles.
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In 2023, a quarter of new cars sold in California were zero-emission, meaning they don’t produce harmful emissions. Expensive gas is pushing more people to buy electric cars,” De Haan explained. “When Californians see gas prices reaching $5 or $6 per gallon, it’s making them consider switching to electric cars faster.”
Division of Petroleum Market Oversight
In 2023, the governor of California, Gavin Newsom, approved a new rule to stop what some people call unfair pricing for gas. This rule is to make how gas prices are set clearer. The governor set up a group called the Division of Petroleum Market Oversight to watch over this rule.
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De Haan said, “There hasn’t really been much impact. But I believe that in the months ahead, there probably will be more on this subject.”
Gas Saving Tips
Families spend a lot on gas every year. In 2022, on average, each family spent about $3,120 on gasoline and other fuels. This amount went up by 45.3% from the previous year. Why the jump? More folks started commuting again after the pandemic, and fuel prices went up, too.
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According to Venegas, making changes in how you drive can help you save a lot of money. Here are a few tips from AAA to save on gas:
- Look for the cheapest gas prices
- Keep your car well-maintained
- Plan your route before heading out
- Drive at a steady pace and obey speed limits
- Avoid aggressive driving