California gas prices are spiking again, what’s going on?
It just might be time to buy an electric vehicle. Or a bike.
Gas prices are spiking again in the Bay Area — as much as 20 to 30 cents a gallon higher than the California average and at least $2 a gallon more than the rest of the country, according to the latest data from the American Automobile Association (AAA).
The national average on Friday was $3.67 a gallon, compared to the Golden State’s $5.45, the highest in the U.S., according to AAA.
Bay Area drivers who are sometimes stuck paying close to $6 a gallon said they are suffering and finding alternate ways to get around.
Frank Auguston filled his tank at a Chevron gas station in Danville where prices spilled over $6 a gallon Wednesday.
“Gas is stupid expensive,” he said.
Linda Franklin was similarly annoyed.
“I’m seriously thinking about buying an EV,” she said while putting gas in her Mazda at a Chevron station in San Jose on Wednesday. “I can’t afford these prices with my commute to Walnut Creek.”
But why does opening your wallet at the gas station become more painful during certain times of the year, and what is driving the recent fuel spike?
“Gasoline prices tend to rise in the spring, just like they dip in the fall and the winter, usually due to demand. As the weather gets nicer and the days longer in the spring heading into summer, gasoline prices tend to rise as more people hit the road,” said Andrew Gross, AAA spokesperson in an email.
Gross said spring is also the time where gasoline is switched from winter blend to summer blend, which is more expensive to refine but helps keep air quality cleaner.
“And then you have to take into account location. The West Coast is what many consider an oil island in that it is far from the main oil production centers of Texas, Oklahoma and the Gulf Coast and those mega refineries down there as well,” Gross said. “And west of the Rockies it’s more challenging to build pipelines, so you tend to move product by rail and truck more than say east of the Rockies. So you also have higher distribution cost that factor in as well.”
While California saw record gas prices in the fall of 2022 when the state average was $6.42 a gallon, the California Energy Commission said the price of crude oil, which is the biggest driver of gas prices, is higher than at any other point this year.
But there’s more to the story.
Tom Klosa, the head of energy analysis at the Oil Price Information Service, said the Bay Area is ground zero when it comes to supply and demand, which has been impacted by recent refinery closures.
In 2020, Marathon closed its refinery in the Bay Area, and over the last year Phillips 66 stopped processing crude oil at Arroyo Grande in San Luis Obispo and Rodeo in Contra Costa County, Klosa said.
“Both companies idled their refineries and are concentrating on supplying renewable fuels such as renewable diesel and sustainable aviation fuel. Neither is making gasoline, and that leaves the area without a safety net. Should one of the remaining refineries (Chevron Richmond, Valero Benicia or PBF Martinez) have issues, supply can become very challenging,” Klosa said.
Another component of high fuel prices is the state’s high gas tax.
California has the highest gas tax in the country at 68 cents per gallon, compared to 39 cents for the national average, according to the American Energy Alliance.
The state also has a cap-and-trade program and low-carbon fuel standard that adds roughly another 46 cents a gallon, according to the group.
Last spring, the state promised Californians some protection at the pump when the California Gas Price Gouging and Transparency Law was signed into law by Gov. Gavin Newsom. The governor said it would protect Californians from gas price gouging by creating an independent watchdog to root out potential gouging and authorizing the California Energy Commission to penalize the oil industry for wrongdoings.
Newsom in November accused “Big Oil” of raking in “huge profits” last summer while gas prices spiked and said that “we’re continuing to hold them accountable with the new tools from our gas price gouging law.” But it remains to be seen how the new Division of Petroleum Market Oversight will affect gas prices.
California Energy Commission spokeswoman Lindsay Buckley said the division is investigating market activity and refinery maintenance schedules and that the commission this year will consider a profit cap to moderate price spikes. She attributed recent gas price spikes to refinery maintenance and spot market activity.
San Jose resident Moses Jackson, who was walking near San Jose’s Rose Garden on Wednesday, said that he now does his errands on foot because fueling up his Chevy truck is just too costly.
“I walk two to three miles a day because of high gas prices,” he said. “When is it going to end? People are hurting. I’m hurting.”
Staff photographer Jane Tyska contributed to this story.
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