Gas prices in California continue to increase higher than U.S. average

The state’s gas prices have risen over $2 more than the U.S. average due to offline oil refineries, prompting an uproar among many residents in the state to demand a decrease in prices. Photo by SIMRAH AHMAD, staff photographer

While gas prices have begun to decrease since June in many states across the U.S., California is an exception to this as prices throughout the state continue to skyrocket over $2 more than the U.S. average.

The state of California has always been used to paying more for gas than many other states in the country. However, as of Oct. 3, California gas prices have risen to 66% more than the national average. The statewide average in California puts gas prices around $6.420 a gallon, which is almost twice the national average of $3.799 a gallon.

Now that California prices have increased at such a quick rate, analysts, along with AAA spokesman John Treanor are stating that refinery issues within the oil industry are to blame for the sudden rise. 

“It’s oil refinery turnaround season,” Treanor said at a press conference with CBS Sacramento. “(Oil companies) go offline due to unplanned maintenance, which ends up limiting the supply. This is an inherent supply and demand issue; supply is simply not meeting demand for gasoline in the state.”

The California gas price average rose to $6.420, which is $1.166 more per gallon than the average gas price of $5.254 last month. Prices in the state have not been this high since March 2022, where California gas prices shot up to an average of $5.835 due to Russia’s invasion of Ukraine.

In March, there were two main factors contributing to the rise in prices, according to Chapman University economics professor Steven Gjerstad. The first is the crude oil pipeline network that connects most of the U.S. but doesn’t extend to the west coast, forcing California to rely on more expensive shipping methods to get crude oil for refining into gas and other products. The second factor pertains to California’s stricter emissions standards, which raises the cost of refined gasoline in the state.

“Those two factors are still important contributors to the high prices now, but the twist this time is that several refineries have been offline for maintenance in California since late September,” Gjerstad said. “That has affected prices across the West Coast.”

Compared to other states in the U.S. such as Texas, Georgia or Florida, whose prices have remained close to the country’s national average due to a surplus of supply from oil refineries, California continues to struggle with its gasoline inventory being at its lowest in a decade. 

As of June 2022, California had 11 operational refineries and two that were idle. This past month, the number now consists of six refineries that are offline in the state due to unplanned maintenance, contributing to the limited supply and the increased demand from residents.

“I really think gas prices are too much for college students and anyone with not that much income to pay for, so it makes a lot of people not be able to go to where they’re supposed to be going,” said senior broadcast journalism and documentary major Hunter Nahoʻoikaika, who used to actively commute to and from campus. “It's difficult because I have a car and I'm not able to use it as much now because gas is so high and I would rather save money.”

A few of the refineries currently offline consist of a few of the largest in the state — Valero in Benicia, Phillips 66 in Wilmington and Marathon in Carson. As to when these three companies will be back online again, that remains unknown. 

“The gas prices right now in California are crazy that it makes it so difficult to get from place to place without spending too much money on gas,” said Jessica Miyasato, a junior business administration major. “In a way, I feel like the government is just trying to profit off of us by increasing the prices by so much.”

Since two weeks ago when prices were at its peak, gas in the state has begun to slowly dwindle back down, falling by $0.18 over the last few days. Analysts, along with Gjerstad, expect that this downward trend will continue over the next several weeks until prices are closer to what they were a month ago. 

According to AAA, the price of gasoline is estimated to fall around $5.50 per gallon even if the price of oil continues to increase in the state. The Organization of the Petroleum Exporting Countries (OPEC) plans to cut down its oil production in order to keep gas prices down across the entire state of California. 

“It seems this was a random event that occurred around the state,” Gjerstad said. “Oil companies are most likely not permitted to disclose their scheduled maintenance because that would violate antitrust laws against price fixing. (The oil companies) may all have been surprised that so many refineries were being shut down for maintenance simultaneously.”

In order to offset the price increases, Gov. Gavin Newsom announced during an Oct. 7 press conference that he is in the process of asking refineries to switch to their winter-blend gas, a gasoline blend used in cold temperatures that is cheaper to produce. This would reduce the price of gas by up to 25 cents in the next two weeks. 

Newsom also stated during the conference that the possibility of passing a new tax on oil companies in response to increased prices come Dec. 5. Through this tax, it will return money to taxpayers and better support residents who struggled to pay high gas prices throughout the year.

“In an area as populated as Los Angeles, these gas prices end up affecting people who rely on their cars for work or in order to travel,” said Los Angeles County resident Sebastian Regalado, who commutes to work daily. “The fact that gas prices are so high is just insane and showcases how big of a jump we’ve made within a small amount of time.”