‘Outrageous’: Gas Prices Reach New Record High In California, US

Jakob Rodgers
The Mercury News

WWR Article Summary (tl;dr) As Jakob Rodgers reports, “California’s statewide average Wednesday was about $1.50 more expensive than the national average, which also hit a new record for unleaded gasoline of $4.67 — a mark that most Californians haven’t seen since February.”

WOODSIDE, California

Gas prices in the Bay Area and California broke records again Wednesday, with some stations hitting $7 a gallon for mid- and premium-grade, exacerbating concerns about inflation and the region’s exceptionally high cost of living.

The average price of regular unleaded gasoline in California hit $6.19 Wednesday, marking the latest in a string of record price hikes that began May 14 and showing no sign of relenting amid oil supply concerns, Russia’s war in Ukraine and rising demand as post-pandemic travel continues to surge. The most expensive places to buy gas in the state were in the Bay Area, with most cities seeing prices at least 15 to 30 cents higher than the rest of the state.

Calling the record prices “ridiculous,” Justin Miller marveled at the $117.74 it cost to refuel his truck at a Chevron gas station in Woodside, where mid- and premium-grade blends cost more than $7 a gallon Wednesday morning before dropping slightly later in the day.

Rising fuel and supply prices recently prompted Miller, 35, to close his pool cleaning and repair business and start working for a different company that builds pools in communities across the Santa Cruz Mountains. But now, those ever-rising fuel costs are adding to the concerns at his new employer, Silver Creek Pools.

“Our costs have gone through the roof,” Miller said. “It’s hard to cut back the driving — you’ve still got to get to a client’s house. At the point it’s at right now, it’s not sustainable.”

“It seems to be getting worse every time I get gas,” he added.

California’s statewide average Wednesday was about $1.50 more expensive than the national average, which also hit a new record for unleaded gasoline of $4.67 — a mark that most Californians haven’t seen since February.

San Francisco ranks as the most expensive place to buy gas in the state, according to AAA, with the average price of regular unleaded hitting $6.48 a gallon. In Oakland and San Jose, the average prices were $6.33 and $6.35, respectively.

Overall, the average price of gas in California has risen 13 cents in the last week and 46 cents in the last month. That’s nearly $2 a gallon more than it was a year ago when gas was being sold for an average of $4.20 a gallon.

Standing at a 76 station in downtown Oakland, Duane Moses shook his head at the eye popping numbers on the gas pump.
He spends about $800 to $1,000 a month commuting back and forth every day from Antioch to San Francisco. That journey hit a new low Wednesday when the gasoline flowing into his black sedan cost a fraction of a penny below $7 a gallon.

“This is kind of outrageous,” Moses said.

The rising cost of gasoline can be traced to a complicated mix of post-pandemic demand for travel, global supply concerns and a war halfway around the world, Bay Area experts said Wednesday. And they warned that it could be a while before prices edge back down.

While the price of crude oil was slightly higher back in March, during the early days of Russia’s invasion of Ukraine, it has remained persistently high in the months since, forcing prices up, said Severin Borenstein, a professor and economist at the University of California, Berkeley.

“The fact is that this is primarily being driven right now by the war in Ukraine, and as much as we don’t like paying $6 a gallon, we still have it a lot better than the people in Ukraine do,” Borenstein said.

High refinery margins also appear to be playing a major role in the continued price surge, said James Sweeney, a professor of management science and engineering at Stanford University. One potential reason is that refineries are changing over to their summer blends, which historically has elevated prices. Also, several refineries closed during the pandemic and have yet to reopen, further pinching supply.

Higher taxes and fees historically have contributed to higher gas prices in California, compared to the rest of the nation. But Borenstein noted there’s also been a difficult-to-explain “mystery” bump of 30 cents in California prices for the last several years. And lately that bump has roughly doubled to 60 cents.

Futures markets suggest that the cost of gasoline could begin to subside in a few months but only by 50 cents at most, Borenstein said.

“There’s no easy answer — we’re going to be stuck with this for a while,” Borenstein said.

Filling up her Audi sedan at a downtown Oakland gas station, Alyssa Corral got just 4.2 gallons with the $30 she put into the pump. Normally that would get her about 220 miles of driving. Now she only expects to get about 140 miles before filling up again.

Still, she added, it’s not like she can just refuse to pay.

“It’s crazy,” Corral said. “It’s a pain, but you gotta pay to get where you want to go.”

Distributed by Tribune Content Agency, LLC.

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