Why is gasoline so expensive in California?


Gasoline prices continue to rise. The national average is currently $4.32 per gallon, according to AAA. In California, however, it’s $5.74 a gallon, the highest in the country.

Gas prices in California are always among the highest. But why is this?

There are three main reasons. “No. 1 is California is a fuel island, so we don’t have pipelines, for example, from Texas delivering crude,” said Kevin Slagle of the Western States Petroleum Association.

California produces about 30% of the oil it needs, he said. “The remaining 70% is imported from largely foreign sources around the world.”

Imported and shipped, which costs more and makes it more vulnerable to supply chain issues.

No. 2? California has higher taxes than other states, said Severin Borenstein of the Haas School of Business at the University of California, Berkeley.

“Our gasoline excise tax is 51 cents a gallon, compared to the average 28 in the rest of the country. We also have environmental levies,” he said.

And number 3? “For about 25 years, California has used cleaner gasoline than the rest of the country, which has helped reduce pollution,” Borenstein said.

But it’s also more expensive to produce, which of course drives up the price.

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