California gas prices rise toward $4
By Douglas A. McIntyre
May 10, 2018, 9:55:45 AM EDT
The average price of a gallon of regular gasoline in the United States is $2.85 and rising. The price was $2.34 a year ago. In the country's largest state by population, the price is much higher and continues to move toward $4.
The average price of regular in California is $3.65 a gallon. In some urban areas, the price is much higher. Currently, gas goes for $3.76 in San Francisco. The fear of $3 gas is meaningless in the state; it breached that level months ago.
The primary enemy of gas prices has always been crude oil. The U.S. has pulled out of a multinational agreement to stop nuclear development in Iran, one of the world’s largest crude producers. So oil prices have jumped above $70. Many experts believe OPEC and Russia will use the chance to raise prices.
In the Western Hemisphere, the country with the largest proven reserves, Venezuela, is in turmoil. Even American and Canadian shale production, which has helped keep worldwide prices low, cannot handle enough demand so prices remain low.
California gas prices are also significantly affected by two other factors. The first is that the gas taxes and levies in the state rank fifth highest in the country at $0.4062 per gallon. Additionally, gas emission rules in California are the strictest in the nation, which means refineries have to produce particularly “clean” gas for the state. Only a limited number of refineries do so.
In 2008, the national price for gas reached $4. The price in California was much higher than the national average then as it is now. The forces that drove those numbers are not in place now. Crude had moved well above $100 a barrel for part of the year.
Even if crude does not reach $100, there are plenty of predictions its will go above $80 quickly. If so, $4 gas in California will not be very far behind.
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