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Why are California’s gas prices so high?

Samantha Fields Mar 15, 2022
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California has always been among the priciest places for a gallon of gas in the U.S. Among the reasons are the state's higher taxes and environmental standards. Frederic J. Brown/AFP via Getty Images

Why are California’s gas prices so high?

Samantha Fields Mar 15, 2022
Heard on:
California has always been among the priciest places for a gallon of gas in the U.S. Among the reasons are the state's higher taxes and environmental standards. Frederic J. Brown/AFP via Getty Images
HTML EMBED:
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Gasoline prices continue to rise. The nationwide average right now is $4.32 a gallon, according to AAA. In California, though, it’s $5.75 a gallon, the highest in the nation.

California’s gas prices are always among the highest. But why is that?

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

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

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

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

“Our excise tax on gasoline is 51 cents a gallon, compared to the rest of the country that averages about 28. We also have environmental fees,” he said.

And No. 3? “For about 25 years, California has been using a cleaner-burning gasoline than the rest of the country that 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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