The mysterious price surge comes as California Gov. In a statement, the California Energy Commission said state refineries are seeing “temporary” production issues that, coupled with maintenance activity and “lower-than-normal gasoline inventories,” is driving the current price spike over the past four weeks. Gas prices displayed at a 76 gas station in Alameda, Calif., on Friday, Sept. “Because of antitrust regulations, we don’t know how individual refineries are operating,” said Kevin Slagle, vice president of the Western States Petroleum Association. Instead, experts glean information from oil production reports. There has been no major refinery outage or catastrophe reported in recent months. He said much of the oil industry deferred regularly scheduled maintenance in spring so they could continue reaping record profits during the energy price spike following the Russian invasion.īut it’s hard to get to the bottom of exactly why California’s oil refiners have reduced output now just as prices drop elsewhere.
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Tom Kloza, of the Oil Price Information Service, said the reduced flow of gas is likely due to refiners bringing equipment offline for maintenance. That means mechanical hiccups at refineries can cause major price spikes not seen elsewhere in the country. Due to the state’s special gas blend, California is often termed a “fuel island” because nearly all gas sold in the state is refined locally by a handful of companies, including Chevron, Marathon Petroleum and PBF Energy. There are also stricter environmental regulations and special fuel blends that prevent rampant smog from accumulating in cities, altogether these factors tack on roughly $1.20 to California’s gas prices.īut the widening gap between what everyone from San Jose to Los Angeles is paying compared to the rest of the country is due to the concentrated nature of California’s oil refineries, experts say. The state’s 54-cent gasoline excise tax is among the highest in the country - only Pennsylvania’s is higher. Much of California’s high gasoline costs are explainable. “It’s not like you can change your career overnight,” said Khvann, a part-time real estate agent. She spends about $800 a month on fuel shuttling around her children. “It’s unfair,” said Sonya Khvann, a single mother of three, who was pumping gas in Alameda on Friday.
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It’s going to go up even more.”Īlthough fuel costs are still down from their peak in June, drivers are contending with nearly seven months of average prices topping $5 a gallon. “If this holds, we’re just starting to see the increase. “The commodity price of gasoline in California has gotten completely out of whack,” said Severin Borenstein an energy economist at UC Berkeley. The premium gas at this station is $6.29 per gallon while the Chevron gas station across the street cost $6.59. Sonya Khvann, of Oakland, fills up her SUV at a 76 gas station in Alameda, Calif., on Friday, Sept.
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