Why Are Gas Prices Still So High in California?

A woman inserting a gas pump nozzle at a gas station stock photo
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Californians don’t want to hear about how much you have to pay for gas if you’re a non-resident. While the other 49 states pay an average of $4.236 a gallon, according to AAA — admittedly, close to the all-time high — the average price in California is $5.882 as of March 24. In cities like Los Angeles, prices at the pump have already pushed above the once unimaginable $6 a gallon mark. Alongside general economic pressures such as rising inflation, high gas prices have become a common conversation piece for many.

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The state with the second-highest price is Nevada at $5.178 a gallon, which is still 70 cents cheaper than across the state line in California. Even more disturbing for California drivers: While much of the rest of the country has seen a slight easing of gas prices over the past week, the price in California keeps moving higher.

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The current California average of $5.882 a gallon is up from $5.875 a day ago and $5.785 a week ago. In contrast, the current national average of $4.236 a gallon is down from $4.237 a day ago and $4.289 a week ago.

So what gives in the Golden State? One problem came in the form of a recent power outage at a major refinery in Torrance, which put even more pressure on a fuel market that was already tight to begin with.

“This is not a planned maintenance issue — it could take two to four weeks for a refinery to return to full capacity,” Doug Shupe, spokesperson for the Auto Club of Southern California, told CNN. “We know drivers are frustrated by it, especially when they’re dealing with higher prices in the rest of their lives.”

The loss of even one refinery out west can send prices soaring because of a regional decline in capacity over the past few years. As CNN noted, data from the U.S. Energy Information Administration shows that refining capacity in western states at the end of 2021 was 12% lower than two years earlier, before the COVID-19 pandemic began. Capacity in 2021 was down 22% since the end of 2007.

Some refineries have been forced to closed for economic reasons, while others are being converted to facilities that can process renewable fuels. The latter is what happened to the Marathon Petroleum refinery in the Bay Area, which stopped refining petroleum products in 2020 and will soon reopen as a renewable diesel refinery.

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Meanwhile, tougher environmental rules have made some oil companies hesitant to invest in new West Coast refineries.

“The West Coast is pretty challenging right now,” Tom Kloza, global head of energy analysis for the Oil Price Information Service, told CNN. “They could use a little more refining capacity or a little less demand.”

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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