Motorists sound off about rising gas prices at the pump
Fuel prices in California and Fresno continued their weeks-long upward climb this week, rising by about a nickel per gallon compared to a week ago and about 50 cents a gallon higher than a month ago.
The average price for regular unleaded gasoline in the state was $4.08 per gallon on Monday, according to AAA Gas Prices. GasBuddy.com, which updates prices in real time based on customers’ reports, reported the average statewide price at $4.07 per gallon. A month ago, on March 29, the average price in California was $3.51 per gallon.
In the Fresno area, the average gas price crept over the $4-per-gallon mark over the past week, reaching $4.03 per gallon on Monday. A week ago, the average was $3.97, and it was $3.52 a month ago. Since March 11, the average price in Fresno has climbed by 83 cents per gallon.
The rising prices come even as some California refineries return to full production after both planned and unplanned maintenance, said Patrick DeHaan, head of petroleum analysis with GasBuddy. But, he added, it could still be a couple of weeks before drivers in California see prices recede.
“Things seem to be cooling off, and I think the biggest increases are behind us,” DeHaan told The Bee on Monday. “By Memorial Day, the worst should be behind us.”
“California refineries, particularly in Southern California, are starting to kick back in from maintenance,” DeHaan said. “But there is usually a lag between refineries getting back online and when their production starts to make an impact” on prices at the pump.
“For it to become more of a buyer’s market, it’s going to take a couple more weeks with a nice-sized build in inventories,” he added. “I’m hopeful that California will come back under $4 a gallon.”
California outpaces nation
Prices in California remain far higher than the nationwide average, which was reported at $2.89 per gallon for regular unleaded on Monday, according to AAA. But they are also well below the all-time high prices of more than $4.60 per gallon, which hit in 2008 in some parts of the state and in 2012 in other California markets.
In a GasBuddy blog on Monday, DeHaan said that crude oil prices were falling, and posted a weekly drop of about $2 per barrel after the Trump administration did away with waivers of sanctions against countries purchasing oil from Iran. President Donald Trump last week used Twitter to ask OPEC to raise production to offset Iran’s exports of more than 1 million barrels of oil per day. “It’s not known if the effect on the market will persist or pass into the future,” DeHaan said of Trump’s tweets.
In the meantime, California Gov. Gavin Newsom last week asked the California Energy Commission to examine why gas prices are higher here than the rest of the country. Newsom blamed “inappropriate industry practices” rather than tougher environmental regulations and higher fuel taxes.
California’s fuel standards include a seasonal switch to a cleaner-burning summer blend of gasoline mandated by the California Air Resources Board — something that kicks in on May 1 in most of the state. Gasoline taxes in California include a federal fuel tax of 18.4 cents per gallon as well as state fuel taxes of 41.7 cents per gallon. Gordon Schemp, a senior fuels specialist with the California Energy Commission, said various taxes and emissions standards typically account for about 70 cents per gallon.
But the rest of the difference between the state and the national average – currently a difference of about $1.19 per gallon – is what the state’s Petroleum Market Advisory Committee in 2017 dubbed “a continuous and significant unexplained differential compared to the rest of the country.”
‘Political finger pointing’
Newsom’s request for an examination of gas prices was countered by the California Republican Party, which placed the blame for rising gas prices squarely on Democratic-based tax increases. “Democrats have proudly and repeatedly raised the cost of gas through taxes and fees, which increases the costs of goods and services,” state GOP spokesman Matt Fleming said in a statement.
A Republican-led effort to repeal SB-1, a fuel tax of about 12 cents per gallon that took effect in November 2017, failed in last fall’s general election. SB-1 aims to repair roads, bridges and other transportation infrastructure across the state.
DeHaan, the GasBuddy analyst, dismissed both Newsom’s request and the Republican response as “political finger pointing.”
“As someone who’s watched this for 15 years, it’s economics,” DeHaan told The Bee. “You do have the nation’s highest gasoline taxes, you have carbon fees, your own blend of CARB-mandated gasoline, a lack of refineries in the state, and the fact that it’s not an easy business to be in as a refinery” in California. “But it’s Economics 101. There’s not enough CARB-mandated gasoline to go around … and prices go up until supplies level off.”
While taxes are a factor in the price of fuel, “that’s not behind why prices are rising,” DeHaan said. “A tax, once implemented, is just there; it’s not actively pushing prices up. That’s a one-and-done impact.”