Gas Prices Top $4.50 In California, Nearing $5

Flying J gas station
TaurusEmerald / Wikimedia Commons

The average price of a gallon of regular gas has dropped to just above $3. It has dropped below that level in more than half of US states. A year ago, the figure was close to $3.50. Gas prices in California, however, average $4.50. And, in several cities, which include San Francisco, they are over $4.60. Is this a harbinger of future prices across the US? Not unless traffic through the Suez Canal slows considerably because of attacks on shipping by Yemen-based Houthi rebels. Gas prices fell below $3 recently. 

Oil prices are, by far, the greatest single influence on gas prices. Shipping problems near the Suez Canal have increased the oil price by $2 in the last few days. However, the price has been below $80 most of the last year, with a brief run to $90 in late September and October. The Israel military conflict with Hamas started on October 7.

California’s gas prices have been high for several reasons. One is the state’s gas taxes and levies. At $.8655, they are the highest in the country. The national average is $.5709. The lowest among all states is Alaska at $.3353.

Another is the number of refineries that produce gas to the state’s specifications. Patrick De Haan, head of petroleum analysis at GasBuddy, told CNN, “The problem is that California is kind of segregated from the rest of the nation in its requirements for gasoline. A declining amount of refineries can produce to that specification.”

And, finally, there is distance from places with the largest crude supplies. Much of the crude oil which supplies the US comes from the Gulf of Mexico. About 20% of crude oil production comes from the Gulf Coast. About 45% of US refinery capacity is there as well.

For these reasons, gas prices will stay much higher in California than in the rest of the country.

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