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California Officials Explain Why Gas Prices Went Up

You might have noticed that gas has gotten pretty pricey lately. It's not just California that's experiencing this phenomenon. The entire US West Coast is seeing higher pump figures. However, now we have some official explanations available. Here's why your commute is more expensive.
Gas Prices in Ludlow, California 30 photos
Photo: AugustDonnelly on Twitter | Edited
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Fall brought us discounted EVs and higher gas prices. While the former does not impact everyone, the latter sure does. Nearly everything is connected to the price of gas. Seeing it rise is not a good sign for the fight against inflation because operating costs are almost always transferred to the customer. That results in a higher cost of living, while wages do not always keep up with it.

The numbers displayed by fuel stations just kept creeping up every day since earlier this month. Naturally, people started wondering what was going on. In some counties, Californians have witnessed absurd costs for a gallon of gas. Even when writing, Those living in Alpine County are paying an average of $6.99 per gallon.

The national average gas price is $3.85, while Americans located or traveling through the Golden State spend $5.79. According to the AAA, Californians see an average of:
  • $5.79 for regular;
  • $6.02 for mid-grade;
  • $6.16 for premium;
  • $6.42 for diesel.

California Energy Commission experts looked into it and found the culprits. They put the blame on traders, inadequate inventories of simple and blended gasoline, the lack of spot market liquidity, and refinery undersupply.

"An unusual transaction took place on the California spot market on Friday, September 15, that caused the market price of gasoline to increase by nearly $0.50 per gallon," explain members of the Division of Petroleum Market Oversight (DPMO) in a letter sent to Governor Gavin Newsom.

At the same time, the officials blame the rising cost of crude oil and point out that Californian refiners are now spending $2.27 per gallon of oil. They bought the same black gold for $2.04 a gallon a month ago.

A Man Filling Up His Car
Photo: Today on YouTube
The recent spike also convinced public officials that it is time to work closely with refiners that are in charge of having enough inventory. For now, however, that translates into just discussing plans.
Newsom read the letter and released a statement. The Governor didn't provide any additional details. He just repeated what the DPMO said.

While the state officials are right and present the facts that led to the recent hikes, it's worth noting that it's not just the summer or winter blend or the refiners' inventories that caused these high gas prices.

Earlier this month, we said that Saudi Arabia, a US ally, is "singlehandedly accelerating EV adoption" because it unjustifiably curbed the crude oil output. Then, it doubled down with Russia and applied even more voluntary cuts. Traders cannot be blamed for acting when supply doesn't meet demand.

It also doesn't help that the US Strategic Petroleum Reserve is at its lowest level in years.

But besides OPEC+'s shenanigans and other accompanying factors, California and the neighboring states have some of the highest taxes on fuel. The Golden State gets almost $0.78 for every gallon of gas sold.

At the end of the day, if crude oil remains expensive, then gas will be pricey, too. There's nothing the US can really do to bring it down. Arizona tried to. It temporarily eliminated the blend requests, but it hasn't worked. The state's average gas price is still well above $4.6 per gallon, nearly $1 more than the national average.

Maybe it's time we all start giving the idea of owning an electric vehicle some serious thought.
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About the author: Florin Amariei
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Car shows on TV and his father's Fiat Tempra may have been Florin's early influences, but nowadays he favors different things, like the power of an F-150 Raptor. He'll never be able to ignore the shape of a Ferrari though, especially a yellow one.
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