Originally Posted By: Benito
The actual reason for the latest spike in Southern CA is a delay in imported product reaching Southern California. Northern CA is not as affected.
They are having to import more than usual because refineries are still operating below capacity. That's something that has been going on for months now.
Those who talk about regulations, taxes, more demand have just been brainwashed. CA uses less gas now than 10 years ago. It is a huge market and should have enough reliable supply and capacity. The price differential due to taxes and CA requirements is far less than the actual premium CA consumers pay.
There are 3 main reasons CA gas price are higher than national average:
1. Special formula that costs about 10-15 cents extra per gallon.
2. Higher tax, on average we pay about 25-30 cents more tax per gallon. We have state excise tax and sale tax of whole sale price(tax over tax). This higher tax and special formula combined makes our price about $50-70 cents higher than national average most of the time.
3. Limited supply, since we have special formula not many out of state refineries can product our blends, and lately they didn't ship as much as the last few years into California. There are few refineries in state and no new one had been built for more than 30 years, any disruption in supply will cause price spike substantially.
Yes, the oil companies do take advantage of the low supply to charge more for gasoline they sell to distributors, but when they try to expand their facilities they had a very hard time to get permit.