Energy expert explains recent spike in California gas prices

David González Image
Friday, September 30, 2022
Why are gas prices in California spiking again?
Many California residents are wondering why gas prices in the state are skyrocketing again. An energy expert explains what's happening and if there's any relief in sight.

LOS ANGELES (KABC) -- Gas prices are skyrocketing once again in California.

In Los Angeles County, the price for a gallon of gas jumped 16 cents overnight and about 70 cents in the last week.

The big question many California residents have is why are pricing spiking?

"Today there are four major refineries that are offline in California. Three for regular maintenance and one because of an upset, and that gasoline is not getting to market," said Ed Hirs, an energy fellow at the University of Houston.

He said those refineries make up part of the state's supply chain.

In addition, Hirs said California produces almost 1 million barrels of oil a day.

However, it's not enough to keep up with the demand, so it imports oil from other states or abroad.

"It just costs money to redirect those cargos and that's why everybody has jumped the price in California," Hirs said.

He said no one regulates gas prices, so if suppliers and retailers are paying more to refuel their tanks, that price is more than likely being passed onto drivers.

"Shell doesn't own gasoline stations, Exxon doesn't own gasoline stations, Chevron, Unocal -- they don't own the gasoline stations that you and I use to fill up," Hirs said. "These are owned by entrepreneurs or by groups of companies. Sometimes by private equity firms and they can raise prices very liberally because -- simply because -- they can."

According to AAA, the national average to fill up hovers around $3.80.

But, a state-by-state breakdown shows California residents are feeling the pain at the pump the most.

In the Golden State, people are paying an average of $6.18.

It more than doubles Mississippi's average of $3.06, which is the lowest in the country.

Hirs said as long as California continues to import gas, prices will remain high.

Also, he said there may be no immediate relief in sight.

Hirs said gas prices may continue to go up because of Hurricane Ian as supply is redirected to help areas affected by the storm.