In the past week, gasoline prices in California have continued to rise. As of Thursday, April 30th, the average price for regular gasoline has soared to $6.010 per gallon, marking the first time since October 2023 that the average gas price in California has surpassed the $6 mark.
According to data released on the American Automobile Association (AAA) website, compared to $5.847 per gallon a week ago, gasoline prices in California have risen by 16.3 cents, an increase of 2.7 cents from the previous day.
Gas prices across the United States have also seen an uptick, reaching $4.30 per gallon, hitting a new high since late July 2022, with an increase of 26.9 cents from a week ago, surpassing the rise in California. However, the average gas prices in the United States still remain significantly below those in California.
The top 10 states with the highest gas prices in the U.S. currently are as follows: California ($6.01), Hawaii ($5.64), Washington ($5.57), Oregon ($5.15), Nevada ($5.12), Alaska ($4.92), Arizona ($4.67), Illinois ($4.66), Michigan ($4.58), and Ohio ($4.46).
Among the counties in California with the highest gas prices are Mono County near Nevada, and Marin County, Napa County in the North Bay area of the San Francisco Bay Area, with prices per gallon reaching $6.951, $6.443, $6.266, and $6.233 respectively.
The average gas price in Los Angeles County in Southern California stands at $6.106 per gallon; while in San Francisco, it reaches $6.21 per gallon.
Last week, there was an increase in gasoline demand in the U.S. market, while the supply decreased. According to data from the U.S. Energy Information Administration (EIA) for the week ending on April 24th, gasoline demand has increased from 9.05 million barrels per day to 9.1 million barrels per day, yet the daily average gasoline production has dropped to 9.8 million barrels.
Due to tight international crude oil supply, there has been an enhanced demand for U.S. crude oil in the global market. Information released by the EIA on Wednesday indicated that last week, daily crude oil exports from the U.S. rose to 6.438 million barrels, reaching a record high. In the week ending on April 24th, the U.S. Department of Energy (DOE) released 7.1 million barrels of crude oil from the Strategic Petroleum Reserve, the highest amount for a week since October 7th, 2022.
The gas prices in California have also been impacted by refinery closures. Valero Energy Corporation recently shut down its Benicia refinery in the San Francisco Bay Area with a daily gasoline production capacity of 145,000 barrels. The refinery’s website stated that most of the facilities would be completely shut down by April. However, Valero stated that they would still strive to fulfill their contractual supply obligations in the California market by importing more gasoline. Despite the shutdown, the Bay Area Air Quality Management District in California announced this week that due to multiple operational and equipment incidents involving Valero over the past few years, which led to air quality issues, the company would be sued and fined millions of dollars.
According to Reuters, due to the closure of the Strait of Hormuz, Valero Corporation’s refinery profit margins have increased, with profits per barrel rising from $9.78 to $14.90. Even if the strait reopens, the company’s refinery profit margins are expected to remain high for 6 months to 1 year.
When factoring in the production capacity loss from the closure of the Phillips 66 refinery in South Los Angeles last year, California’s gasoline production capacity has dropped by approximately 17% to 20% over the past year.
The resurgence of gas prices in California above $6 has sparked discussions among various parties. An article from Quartz, a U.S. news website, highlighted that gas prices have become a political burden that both parties find difficult to bear. The White House may be feeling the increasing pressure as the midterm elections approach, while Governor Newsom of California faces criticism over various Democratic policies.
During a debate among gubernatorial candidates on Tuesday, Democratic candidate Tom Steyer attributed California’s high gas prices to big oil companies and the conflict with Iran. However, comments on the X platform by Californians did not entirely agree, pointing out that despite the increase in gas prices nationwide during times of conflict, they are still considerably lower outside of California.
Republican candidate Steve Hilton criticized California’s current oil policies, stating that California imports oil from Iraq, 7,500 miles away, rather than utilizing oil production within the state, such as in Kern County. He mentioned that if elected, he would end California’s current oil policy, enabling Californians to have gasoline priced at $3 per gallon.
California relies on imports for approximately 75% of its crude oil, with one-third of that coming from the Middle East.
In recent years, there have been changes in California’s oil extraction policies. Governor Newsom stated in a press release in March that the SB237 bill signed last year has helped increase crude oil production in Kern County. Since January, the California Department of Conservation has approved 128 new oil drilling permits.