What's Behind California's Big Gas-Price Gap?

Golden State motorist paid nearly $1/gallon more than national average in March, CEC says

SAN FRANCISCO – March was an expensive month for motorists in California. California Energy Commission CEC gas prices (CSP Daily News / Convenience Stores / Gas Station)

According to the California Energy Commission (CEC), the state’s energy policy and planning agency, retail gasoline prices averaged 90 cents more per gallon (CPG) than the national average in March.

The agency cited supply issues thanks to the shutdown of two refineries. Production stalled at Tesoro Corp.’s Golden Eagle facility in Martinez, Calif., because of a labor strike, while an explosion and a later fire reduced operations at ExxonMobil’s Torrance, Calif., refinery.

Gordon Schremp, senior fuels specialist at the CEC, told Reuters that other factors behind the gap included the state’s higher gasoline taxes, its mandated use of seasonal, cleaner-burning gasoline blends and some additional cost from its carbon cap-and-trade program.

The refinery shutdowns and the transition to a cleaner-burning summer blend alone resulted in a $700 billion increase in what Californians spent on gasoline in March compared to the rest of the country, Schremp said.

Separately, Consumer Watchdog, a nonprofit progressive consumer group based in Santa Monica, Calif., conducted an analysis of Energy Information Administration (EIA) data that it said determined that California motorists paid an additional $1.05 billion for gasoline in March.

Its analysis found that California retail gasoline prices averaged 84 CPG higher than the national average, or $3.38 per gallon. The resulting March price gap between the California and national averages was nearly double what it was in February, or $550 million, according to the group.

Consumer Watchdog’s analysis also found that in March, California motorists paid an extra $34 million per day, or $43 per driver, compared to the national average. In a recent report, the group charged that refiners were ensuring California’s higher prices and profiting from volatility by maintaining a low gasoline inventory, or 10.7 days of gasoline supply on hand versus the national average of 18 days.

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