Energy Economy

Gas Hits $3 in California

Douglas A. McIntyre

Amid news that gasoline prices will rise in coming weeks, the price of a gallon of regular, on average, has hit $3 in California. The state now has the highest gas prices, except for those in Hawaii. The national average is $2.31, so the price in California is 30% higher.

California’s high average price is primarily due to prices that are above $3 a gallon in some of its largest cities. In San Francisco, the price has reached $3.15. In Los Angeles, it is $3.06, and in San Diego it is $3.03, according to GasBuddy.

GasBuddy reports that refineries shuttered for maintenance and a changeover to summer gas blends are among the contributors to gas prices across the United States. The effects are not uniform. In some parts of Texas, Oklahoma and Alabama, which are close to refineries on the Gulf of Mexico, prices are barely above $2 a gallon.

Another reason for high gas prices in California is high taxes and levies on gas purchases. While the U.S. gas tax averages $0.494 a gallon, according to the American Petroleum Institute, the figure in California is $0.565. In Texas, the figure is $0.384.

Refinery shutdowns are intermittent. Gas taxes rarely rise. That leaves the price of oil to swing prices higher or lower. Crude prices continue to be above $50 a barrel.

OPEC nations and other large producers, like Russia, meet in Texas this week. Among the most important parts of the agenda is whether they will hold the line on the production cuts set in December. If so, there is unlikely to be any relief to gas prices, and California prices are unlikely to drop much below $3.