San Francisco, CA

Why California keeps having the highest gas prices in the country?

Josue Torres

Gas prices in California hit a new high on Wednesday, reaching $4.87 per gallon in San Francisco and prices exceeding $5 on numerous gas stations.

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According to the American Automobile Association’s data, drivers in the Bay Area pay the highest per-gallon costs in the country, considerably above the state average of $4.73 and the national average of $3.42.

Gas prices were lower elsewhere in California, but not by much. 

According to AAA, the average price in both Oakland and San Jose was about $4.79. The average price in Los Angeles was $4.68, while in Sacramento it was $4.71.

The rising gas costs may be attributed to a slew of factors, beginning with the pandemic.

When everyone parked their cars and stayed at home, gasoline use dropped by roughly 60%. 

Crude oil prices decreased, and several refineries and oil production facilities laid off employees and reduced output.

When demand began to recover dramatically last spring, gas and oil producers were forced to play catch-up. Gas prices began to rise throughout the nation at that time and have continued to rise.

Production did increase, but energy crises around the world raised the demand for gas and oil and helped drive crude oil prices higher.

The jump in gas prices in the past eight weeks is a result of the worldwide supply shortage.

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Californians were also impacted when atmospheric river inundations last month halted operations at certain refineries.

California drivers pay more at the pump because of several characteristics that are not present in most states, such as high gas taxes and fees, state air pollution rules, and a short number of refineries.

It all ends adding up. Due to all of the current conditions, operating a refinery in California is quite difficult.

Gas prices in the Bay Area, notably in San Francisco, are higher due to factors such as high living expenses, a small number of gas stations, and Northern California’s few refineries.

For the last five years, California has consistently maintained the title of the most expensive state to purchase gas, a spurious honor formerly held by Hawaii, which has no oil reserves and just one refinery.

AAA predicts that California gas prices will continue to rise in the run-up to the Thanksgiving holiday. Around 53.4 million people are expected to travel for Thanksgiving, with 90 percent of them likely choosing to drive to their destination.

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Prices usually fall after Labor Day because demand falls and the summer clean-air formula for California’s gas is no longer necessary, but that hasn’t happened this year. 

The price of crude oil has been over $80 per barrel for many weeks, and it influences almost 60% of what individuals spend at petrol stations.

Gas prices in California could continue to be high, maybe with a tiny drop through the holidays, and might not decline until the spring, when production is likely to grow dramatically. 

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San Francisco, CA
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