Why gas is so expensive in California (2024)

FAQs

Why gas is so expensive in California? ›

"California has its own blend of gasoline, it has very high taxes, and it has a cap-and-trade program," De Haan said. "All of those factor into what you pay at the pump."

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 high taxes and fees associated with initiatives to reduce carbon emissions.

Factors that could impact your bill include the commodity cost of natural gas (also referred to as the “core procurement gas price”), seasonal variations, an increase in your natural gas appliance usage, weather conditions, and any remaining unpaid balance from prior bills.

California's excise tax on gasoline will increase from 57.9 cents per gallon to 59.6 cents per gallon July 1, the California Department of Tax and Fee Administration announced via a notice to retailers. The excise tax on diesel fuel will increase from 44.1 cents per gallon to 45.4 cents per gallon.

Petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.

Mississippi has the lowest price of gas, with an average of $3.00 per gallon of regular gas.

Data as of May 24, 2024. Western and Pacific states face the most costly gas in the nation, as the five states with the highest prices are California, Hawaii ($4.79), Washington ($4.57), Oregon ($4.33) and Nevada ($4.32).

To determine which states are the most affordable, the research team at USA TODAY Homefront looked at the cost of living by state. Utah came out on top as the most affordable state, thanks to manageable health care costs. On the other hand, the high homeownership costs landed New York as the least affordable state.

What makes up the cost of a gallon of gas in California? ›

In a May 2019 report exploring why California gasoline prices had soared to as much as $1.11 a gallon higher than the US average, six core reasons were given: (1) higher cost of producing compliant gasoline (19.6% of the difference), (2) higher fuel taxes (27.5%), (3) Cap & Trade costs (15.8%), (4) Low Carbon Fuel ...

California pumps out the highest state gas tax rate of 77.9 cents per gallon (cpg), followed by Illinois (66.5 cpg) and Pennsylvania (62.2 cpg). The lowest state gas tax rates can be found in Alaska at 9.0 cents per gallon, followed by Missouri (17.5 cpg) and Mississippi (18.4 cpg).

The West Coast has notoriously high gas prices in part because the region is considered a fuel island. California is cut off by the Rockies mountain range from the oil market in the east. The state instead relies on international imports via the Panama Canal, which connects the Atlantic Ocean to the Pacific Ocean.

It's not just housing that adds up – health care, taxes, food and transportation all contribute to California's growing cost of living.

Low supply: Infrastructure repairs in Texas and high gasoline demand in Canada resulted in fewer imports to California, which gets almost 90% of its natural gas from out of state. Lower-than-normal stockpiles in Northern California reduced the available slack in the system.

"If you ask the State of California, they'll say there's two reasons: one, there's maintenance issues going on in refineries in California, and two, the global price for oil is very expensive," said John Treanor, a AAA spokesperson.