The only state where gas prices continue to surge is California. The cost per gallon in the Golden State is up 23 cents to $5.27 per gallon in less than a week. The nationwide average is $3.54 per gallon, up 4 cents a gallon during the same period.
California’s regulations for renewable fuels is the reason.
Tom Kloza, energy analysis at OPIS, points to refinery challenges as the main culprit for California’s surging prices, including an important Phillips 66 refiner in the Bay Area halting gasoline production in favor of renewable diesel.
And soon all the oil producers may leave California.
Andy Lipow, president of Lipow Oil Associates, said California law’s requirements “may lead some gasoline importers to halt doing business in the state and that could exacerbate the supply situation at exactly the same time supplies from outside the state are needed.”
California’s gasoline has traditionally been more expensive than the rest of the country because of the state’s special blend requirements, which are more costly to produce. California also imposes the country’s highest gas taxes and fees for gas and oil producers.
So, what are drivers to do? “I understand people need to drive their cars to get to and from work and to pick up their children and take them to school and things of that nature. However, they might think twice about driving over the summer holiday if gas prices reach a level that they deem unacceptable,” said Regina Mayor, KPMG global head of clients and markets.