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Why are California’s gas prices rising while nationwide prices fall?

The price of gas nationwide has continued to fall. Dropping for the 13th straight week. But the price of gas in California is going up.

The nationwide average price of gas is $3.71. That is down from $4 per gallon a month ago according to AAA. Meanwhile, the price of gas in California has gone up 6 cents per gallon in the past month to an average price of $5.43. That is a difference of $1.72 between the state and the national average. One year ago that difference was only $1.22 per gallon.

Californians have always paid more for their gas, but why has the difference increased by 50 cents per gallon? The state does have higher gas taxes, but that doesn’t explain the increase in the differential over the past year.

“We continue to see the national average price of gasoline decline, now for the thirteenth straight week. But, we’re seeing drastically different price behaviors from coast to coast, with some areas seeing noticeable increases while others are seeing decreases,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “Refinery issues in California are leading to increases in areas supplied by the state’s refineries, including areas of Arizona, Nevada, Oregon, Washington and of course, California. Gasoline supply remains tight for the East Coast with some modest moves up, while prices continue to edge lower in the Plains, South and areas of the Great Lakes. For now, I believe the drop in prices will overpower the increases, leading to potentially another decline this week, but we’re in a very fragile time and certainly could see a broader move higher in the weeks ahead.”

Gas Buddy

Other issues affecting California’s prices are refineries which need to operate at full capacity to support the state’s gas consumption. Typically refineries are shut down in the spring and fall for maintenance. When those refineries shut down it can take longer for the state to get oil and gas from other sources.
California has mandated cleaner fuel in the state which also adds to the overall cost of gas.

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