Regular gasoline for $6 a gallon everywhere in California, all the time?
It’s getting close, experts say.
Sacramento’s average price for a gallon of regular hit an all-time high Wednesday of $5.80, up 16 cents from a week ago and about $1.73 from last May.
Statewide, the average was $5.85, up 9 cents from a week ago and inching toward the record of $5.92 hit in March.
That record is likely to be shattered.
“Unpredictable, but more likely higher two weeks from now,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
That’s because “the key drivers behind the higher gasoline prices in California have not changed much,” said Sanjay Varshney, professor of finance at California State University, Sacramento.
Supplies remain tight, as port backups continue and truckers still face shortages of drivers and equipment.
The federal Energy Information Administration predicted this week that crude oil prices would remain above $100 a barrel this year.
Other factors Varshney mentioned that are keeping prices up: The war in Ukraine has tightened the global supply, and politicians from Sacramento to Washington find there’s little they can do to get prices to stabilize.
The biggest political clamor has involved efforts to suspend gasoline taxes. But the experience of some states shows that’s only a temporary reprieve.
In Maryland, the 36.1 cents a gallon state gasoline tax was suspended from mid-March to mid-April. Price dropped — the average a month ago was $3.74. But Wednesday, the state saw a new record, as a price of regular hit $4.14 a gallon.
Rep. Josh Harder, D-Turlock, is part of a House of Representatives group pushing to suspend the 18.4 cents a gallon gasoline tax until the end of this year. And Gov. Gavin Newsom had proposed pausing the likely increase in California’s gas tax scheduled to take effect in July.
Neither is likely to happen, and De Haan said that’s probably for the best.
“That might drive up demand and price further,” he said of such tax breaks.
Why are prices so high?
California has long had the nation’s highest average gasoline prices, for several reasons.
One is taxes. Its 86.55 cents a gallon in state and local taxes is the nation’s highest as of January, the American Petroleum Institute said.
Also contributing: A reformulated gasoline program that’s more stringent than the federal government’s program, according to the federal Energy Information Administration.
It explains that “California gasoline prices are generally higher and more variable than prices in other states because relatively few supply sources offer California’s unique blend of gasoline outside of the state.”
And for environmental reasons, the state’s gasoline must use a different formula when the weather is expected to be warmer.
The Energy Department has also found that “California refineries need to run at near full capacity to meet the state’s gasoline demand.” If a state refinery encounters problems, prices can go up, as supplies from other parts of the country can take a long time to reach California.
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