Slight drop in California average gas prices could signal relief in the weeks ahead, experts say – Times-Herald

Although Californians typically pay the highest gas prices in the U.S., as a result of Russia’s invasion of Ukraine, some Golden State drivers have thrown in more than $ 6 per liter of unleaded regular fuel in recent weeks.

But a small drop in the state’s average gas price, from $ 5,919 on Wednesday to $ 5,910 on Wednesday, could tell hopeful news in the coming weeks.

Southern California, which has been hit hardest by the price hike, could see a drop of between 35 and 75 cents per liter in the coming weeks, Patrick De Haan, head of oil analysis at GasBuddy, wrote on Twitter.

“My advice to San Diego, Los Angeles and SoCalans in general – don’t be in a hurry. Prices will go down,” he wrote.

Meanwhile, the state average fell a penny to $ 4.23 on Wednesday, the same price as a week ago, according to the AAA. After reaching a high of $ 4.33 per liter on March 11, the state average began to fall before stabilizing in recent weeks. The fall in gas prices has slowed, with the cost of a barrel of crude oil hovering around $ 110.

“The global oil market reflects the volatility caused by the war in Ukraine,” AAA spokesman Andrew Gross said in a news release Monday. “And as it refuses to lower oil prices, it also faces a further drop in pump prices.”

Californians pay the highest fuel prices in the country, in part because of higher taxes on infrastructure and environmental regulations. California also needs a cleaner and more expensive gas mix compared to the rest of the country because of the state’s high emission standards, and out-of-state refineries don’t necessarily produce fuel on a regular basis. Higher living costs in California can also lead to higher prices.

Seasonal switching to more expensive California summer gasoline blends, usually in conjunction with rising prices to cover the cost of producing that blend, can also result in higher prices in the months leading up to warmer weather.

In San Francisco, the average price is about $ 5.94 a liter, and the average price in Oakland has dropped by a penny to about $ 5.86. Overall prices appear to have stabilized, with $ 5.85 remaining in the San Jose and $ 5.86 area in the Santa Cruz / Watsonville area.

Prime Minister Gavin Newsom presented a proposal last week to provide some financial assistance to drivers. Under his proposal, owners of registered vehicles would be entitled to payments of $ 400 for each vehicle they own, limited to two vehicles – a total cost of $ 9 billion, out of an estimated $ 20.6 billion of the state’s budget surplus. The program does not have an income limit, which also includes owners of electric vehicles, but excludes people without a car.

Newsom’s proposal comes after a group of Democratic and independent lawmakers advocating a $ 400 temporary allowance for all taxpayers, which also cost $ 9 billion. Republican state lawmakers had earlier called for a state tax cut of 51 cents.

There is also a mysterious “surcharge” in California, said UC Berkeley professor Severin Borenstein, who is researching gas prices. Borenstein said that after an explosion at the Exxon Mobil refinery in 2015, an undisclosed premium went into the pockets of gasoline vendors. The surcharge reached 92 cents on Tuesday, most likely due to disruptions at refineries, according to Borenstein.

The surcharge could be “due to a supply chain restriction or regulatory issue,” he wrote on Twitter. “Or it could be the exploitation of market power in the CA’s concentrated refining / distribution network. I think we should guess what it is. ‘

Slight drop in California average gas prices could signal relief in the weeks ahead, experts say – Times-Herald Source link Slight drop in California average gas prices could signal relief in the weeks ahead, experts say – Times-Herald

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