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California Gas Prices Causing Spike in National Average

Gov. Newsom wants to know why CA gas is so high

By Katy Grimes, May 5, 2019 2:05 am

California’s high gas prices are behind the spike in the national average cost of a gallon of gas. California’s average price of $4.096 is up 44 cents from a month ago and 46 cents from a year ago, according to AAA.

Gas Buddy: Sacramento gas prices

The national average hit $2.90 on Friday, up 20 cents from a month ago and 8 cents more than a year ago, said AAA. The lowest price for gas is in Alabama, at $2.513 per gallon.

In April, California Globe addressed the rise in gas prices more than eight weeks in a row in California, and has followed legislation impacting the oil and gas industry.

In April Gov. Gavin Newsom asked the California Energy Commission for an analysis of the state’s gas prices by May 15. Many smirked at his request, but he is correct to ask. However, California lawmakers have demanded explanations for high gas prices in the 1990s, early 2000s and 2006, but received little information.

Most recently, a group of California legislators asked California Attorney General Xavier Becerra to investigate. Sen. Ben Allen (D-Santa Monica) wanted to know if it was oil company gouging, or something else.

Mystery Gas Surcharge Still a Mystery

Severin Borenstein, faculty director at the Energy Institute at the University of California, Berkeley’s business school has researched the mystery gas surcharges: “there’s also a mystery surcharge on California gas: In the past few years, the price gap with other states has jumped much more than costs and taxes can explain.”

“Part of that difference is due to higher taxes,” Borenstein wrote in October 2018. “And part is our cleaner-burning fuel – adopted in 1996 to cut unhealthy smog – which costs more to make.”

“Then there are the fees to address environmental impacts, both climate change and local pollution. The state’s cap-and-trade program on greenhouse gases has added 12 cents a gallon this year, and our “low carbon fuel standard” has pushed the price up by about 8 cents. Most analysts think that producing our smog-reducing gasoline formulation costs no more than 10 cents extra. By the way, it is also one reason you can now see the mountains from downtown Los Angeles. Finally, we pay 2 cents to clean up old gas station sites where fuel leaked into the soil.”

“When you add up those taxes, fees and extra production costs, Californians are paying about 58 cents a gallon more than the average American. That’s real money considering that we use about 1 gallon of gasoline per person per day.”

“…the mystery surcharge, which has been about 22 cents a gallon this year. That surcharge – above the difference in taxes, fees, and production costs – averaged 2 cents from 2000 to 2014 and was never more than 12 cents in any of those years. But everything changed in 2015.”

Borenstein said that since February 2015 this mystery surcharge “has cost Californians more than $17 billion, or about $1,700 for a family of four. And none of those dollars has gone to building infrastructure or helping poor families.”

In 2015 the mystery surcharge was around 48 cents a gallon. “What was more disturbing was that it continued at unprecedented levels in 2016 (29 cents) and 2017 (27 cents), long after the Torrance refinery was back at full production.”

By May 15 we may know more about this mystery surcharge.

Katy Grimes

Katy Grimes, the Editor of the California Globe, is a long-time Investigative Journalist covering the California State Capitol, and the co-author of California's War Against Donald Trump: Who Wins? Who Loses?
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6 thoughts on “California Gas Prices Causing Spike in National Average

  1. By the way, it is also one reason you can now see the mountains from downtown Los Angeles. This is a false bit of snark, I’ve lived in so cal since 1954 and yes I lived through the smog to clean years, the 80’s saw this not after they put MTBE’s in our gas that seeped into our groundwater. We the Taxpayer are stuck with paying for their ideological missteps. So we the gas users are paying to dismantle someone else’s business? How about the abandoned Wind Turbines? Investors get to walk away after 5 years.

    1. I’m so glad you picked up on that. Actually, the Los Angeles basin has always had “smog” and poor air because it is a basin.
      Los Angeles suffered from actual smog well before World War II, as well. In the 1540’s when Spanish sailors entered San Pedro Bay they recorded air pollution captured in the basin. This was smoke from fires from nearby Indian villages.
      The inversion layer acts as an atmospheric lid, trapping whatever pollutants – from cars, industry, smoke, etc…
      Granted that So Cal has made huge strides on air quality, but it is frustrating when the state and scientists aren’t honest about the actual physical conditions with the mountains, and atmospheric conditions.

  2. Can we trust any “research” that comes from UC Berkeley which is dominated by Marxists and leftist Democrat socialists?
    More than likely California’s higher gas prices are almost entirely due to taxes, fees, and regulations imposed by Democrat socialist politicians.

  3. Hi Katy

    “Granted that So Cal has made huge strides on air quality, but it is frustrating when the state and scientists aren’t honest about the actual physical conditions with the mountains, and atmospheric conditions.”

    Thank you I appreciate your non biased opinion. Not to many California scientists admit its the environment that causes pollution. they recently found large amounts of methane being emitted from deep in the Earth. I enjoyed your information on the gas maybe you might enjoy this.


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