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Why is gas more expensive in California?

The war in Ukraine is exacerbating the energy crisis, putting further strain on the pockets of Americans as the price of a gallon exceeds $5.

Gas prices over $5.00 a gallon are posted at a petrol station in Los Angeles, California on March 4, 2022.
Frederic J. BrownAFP

According to the American Automobile Association (AAA), the average statewide price of a gallon of fuel in California has exceeded $5 for the fist time ever, the exact figure on March 5 being $5.17.

Patrick De Haan, head of petroleum analysis at Gas Buddy, says the fuel price increase will only get larger.

Gas Prices Continue Steady Rise As Russia Invades Ukraine
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Gas Prices Continue Steady Rise As Russia Invades UkraineScott OlsonAFP

There will be more increases coming, maybe to the tune of another 20-30 cents a gallon. I do expect the national average in the United States will hit the $4 a gallon mark. That's less than 2-3 weeks away.

Patrick De Haan, head of petroleum analysis at Gas Buddy

And for California, the price is likely to rise as high as $5.50. The sunshine state is seeing prices much higher than the US average. Prices are increasing nationwide, but California is being affected particularly acutely.

Why is Californian gas so expensive compared to other states?

Using the same data set from the AAA, the average price of a gallon of fuel is $3.922. The cheapest states are Oklahoma, Arkansas, Missouri and Texas, with prices of under $3.60 a gallon. These prices are expected to increase further if Congress passes a bill ending imports of oil from Russia. Despite the latest figures showing this would impact 7 percent of all imports, the move would push prices up.

In terms of California specifically, the state imports around 70 percent of its fuel, making the state particularly vulnerable to large market fluctuations, as is being experienced with the war in Ukraine. In contrast, Texas is the highest producer of both crude oil and natural gas, as well as leading the way on the size of its wind energy facilities. This means that Texas is far less reliant on outside factors in terms of its fuel price, no wonder they are one of the cheapest places in the US to purchase fuel right now.

With inflation taken into account, the highest price for fuel in the state was actually in 2008, where prices reached what would be $5.25 in today's money. Fluctuations are common, but this will be no solace to Americans who are seeing everyday bills continue to rise.

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Keeping prices low in the short term is difficult, as the need to prioritise renewable energy production, in the wake of the COP26 climate meeting in November, as well as the Biden administration's reluctance to commit to developments of new oil fields means not much can be done.


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