Not all Americans are enjoying the relatively low gas prices we’ve had this winter. Gasoline prices shot up around 40 cents in California since January, currently sitting at $4.60 a gallon, according to AAA. That’s about $1.70 more than the national average.
Decades of state policies have caused the situation California is in today. For one?
“The taxes are about 40 cents a gallon higher,” said Robert Auers, a refined fuels market analyst at RBN Energy.
He said state policies have also made it harder for refiners to update or build new facilities in California.
“What’s really the biggest killer is the inability to invest at all. I mean, if you ever did want to build something there, it’s really expensive, but you can’t even get to that point because there are so many points along the way where projects can get stopped,” Auers said.
So, refineries have degraded and become outdated. Now, as refiners leave the state, Californians are paying extra to get their gasoline from elsewhere, like the Pacific Northwest and the U.S. Gulf Coast, said long-time energy analyst Tom Kloza.
“But it takes a while. You know, it’s a long voyage through the Panama Canal,” he said.
And that gasoline has to go through the Bahamas first because of the Jones Act, which limits shipping from U.S. port to U.S. port.
“We’re also bringing in gasoline from places like Singapore, India, South Korea,” Kloza said.
It’s a tradeoff for being a state that prioritizes air quality, said Matthew Zaragoza-Watkins, an economist at University of California, Davis.
“There’s this tension between California’s goal of decarbonization,” he said. “And costs, essentially prices, for consumers.”
For the low and middle income households that can’t afford an electric vehicle, they pay the price for California’s regulations at the pump.
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