Why California’s gas prices increased 41 cents a gallon in February
Why California’s gas prices increased 41 cents a gallon in February
Gasoline prices in California went up as the national average stayed steady.
California drivers are seeing an increase in fuel expenses. The price of a gallon of regular gas rose 41 cents from one month ago. That would amount to about $243 more a year for a car getting average mileage (24.4 miles per gallon) that is driven the average distance (14,489 miles) per year.
One of the main factors in the recent increase is the October passage of Assembly Bill X2-1, which requires California oil refineries to maintain a ready stock of gas. Additional costs for producers factor into retail prices. Depending on the costs incurred by refiners for building or acquiring extra gasoline storage capacity, and the amount of supply that refiners must maintain, the estimated retail price bump could range from 4.7 cents to 27 cents per gallon.
On Nov. 8, the California Air Resources Board voted 12-2 to impose new blend mandates for California’s Low Carbon Fuel Standard. The new standards require that refiners produce, and retail gas stations sell, the new blend this year. The board contends that the new blend is necessary to achieve carbon and methane emission reduction targets set by Gov. Gavin Newsom. The state is requiring all new cars sold in California to be electric by 2035, which the Trump administration’s EPA director is challenging.
According to a report by the Kleinman Center for Energy Policy, California’s gas prices could be on the verge of a 65-cent increase in the near term. However on Tuesday, the air board’s mandate was rejected by the state Office of Administrative Law. “The Office of Administrative Law issued a routine disapproval of the Low Carbon Fuel Standard amendments on technical grounds, not on the merits of the regulation,” said board spokesman Dave Clegern on Tuesday.
The board has 120 days to resubmit.
The governor’s office urged the board to hasten completion of its blended-fuel rules based on a study conducted by UC Berkeley and the United States Naval Academy showing that ethanol blending could lower gas prices by up to 20 cents. Some critics say ethanol in fuel lowers vehicle performance and harms fuel lines.
In December, Assembly Bill 30 was introduced. This bill would require the air board to complete its blend rule by July 1 for gasoline containing 10.5% to 15% ethanol. It has yet to be voted on. The state Senate’s minority leader, Republican Brian Jones, told KABC Channel 7 in November, “California has waivers from the federal government on the regulation of fuel production, fuel supply, and the EPA lets California do whatever it wants to do with these waivers. I want to look into how the federal government can remove these waivers and begin to bring some accountability to these unelected bureaucrats.”
The EPA began reviewing the waivers Feb. 14.
The charts below show California’s gas prices versus other states and how California’s counties compare.
You can find AAA’s interactive chart of gas prices here.
Hawaii usually has the highest fuel prices, but California surpassed them in February. Hawaii’s average is $4.536.
California had the highest state gas tax in 2024: 68.1 cents a gallon. Illinois was second at 66.5 cents. Most states are in the 20-30-cent range.Other taxes in California: Federal excise tax is 18 cents. Nine cents are levied for the low-carbon fuel standard, and 31 cents for cap-and-trade to lower carbon emissions. 11 cents go to local and state sales tax. Underground storage and maintenance for fuel take 2 cents. Total: About an additional $1.29 per gallon as of 2024.
The number of refineries producing gasoline in the state has fallen from 43 in the 1980s to only nine. Within 72 hours of the passage of AB X2-1, Phillips 66 announced the closing of its Los Angeles refinery, which accounted for 8.57% of the state’s production.
Sources: AAA, Tax Foundation, Energy.ca.gov, U.S. Energy Information Administration, California Energy Commission Transportation Fuels Data, CalMatters.org, California Globe
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