California Gas Prices Surge Amid Refinery Closures
In recent weeks, California has experienced a notable increase in gasoline prices, primarily due to a rise in refining volumes. This uptick comes at a time when the state’s refining capacity has been reduced, leading to a tighter supply.
Over just two weeks, gas prices have jumped by 40 cents. According to AAA, the average price now stands at $4.58 per gallon, up from $4.46 the previous week and substantially higher than $4.18 from two weeks ago. These figures are starkly higher than the national average of $2.92 per gallon. In fact, California’s gas prices are the highest in the country, surpassing those in Hawaii at $4.37, Washington at $4.15, and Oregon at $3.68.
The surge in gas prices is linked to reduced refining capacity, notably following the decreases in operations at the Valero refinery in Benicia and the earlier shutdown of the Phillips 66 refinery in Los Angeles.
With the Benicia refinery now closed, California has only six oil refineries remaining. It’s worth mentioning that California is the second-largest fuel consumer in the U.S., right after Texas. The state’s remaining refineries include Chevron’s Richmond refinery and PBF Energy’s Martinez refinery in the Bay Area, as well as several facilities in Southern California.
Amid the tightening supply, California’s Senate Republican caucus has reached out to Governor Gavin Newsom, urging him to convene a special legislative session to tackle what they describe as a worsening “cost and supply crisis” stemming from state policies affecting the oil refining industry.
State Senator Suzette Martinez-Validares expressed grave concerns, stating, “California is at a breaking point. Refineries are closing, supply is decreasing, and my constituents are paying more at the pump every day.” She emphasized that this situation is not hypothetical but a reality that worsens over time if unaddressed.
On a broader scale, while gas prices have been trending downward nationally, the latest Bureau of Labor Statistics (BLS) data reflects a decrease of 7.5% in gas prices compared to the previous year, along with a month-over-month decline of 3.2%. However, this decrease has been partially offset by rising electricity rates and local gas service rates, which increased by 6.3% and 9.8% year-over-year, respectively.
