California Gas Prices Are Now Higher Than Federal Minimum Wage

Man's hand holding three hundred US dollars and gas nozzle while  pumping gas into parked vehicle.
wingedwolf / Getty Images/iStockphoto

The national average gas price hit $4.62 per gallon for the last day of May, up above even Memorial Day weekend prices. But some states are being hit harder by gas prices than others. In California, for example, a gallon of gas at some stations now costs more than the federal minimum wage of $7.25.

Fortunately, California’s minimum wage is nearly double that of the federal minimum. Entry level hourly workers in California earn at least $14 an hour. But that $14 isn’t going as far as it used to when it comes to filling their gas tanks, either.

Where Is the Most Expensive Gas in California?

GasBuddy’s Patrick De Haan told CBS News that nine gas stations in California charge more than $7.25 per gallon. These stations are Chevron, Mobil, Shell and one Valero in the cities of Los Angeles, Lee Vining, Bridgeport, Menlo Park and Shoshone. The Chevron at 901 N. Alameda Street in Los Angeles boasts the dubious distinction of the highest gas price in the country, with regular unleaded going for $8.05 per gallon.  

Why Is Gas in California So Expensive?

The average price in California right now is $6.16, which is currently the highest in the country. California residents pay higher taxes on gas than those in other states, which goes toward infrastructure, sustainability and other costs.

Make Your Money Work for You

But the state also suffers from what University of California economist Severin Borenstein dubbed the “mystery gasoline surcharge.” California has high property taxes, land is expensive, and the cost-of-living there is 39% higher than the average U.S. city, according to data published by from the 2021 Cost-of-Living Index.

While these factors all contribute to more expensive gas, Borenstein has asserted unidentifiable factors also drive costs up in California. Branded stations, like those on the list of the priciest stations, can charge a premium — and in California, that premium seems to be higher than in other states.

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