Gasoline prices in California have increased by a total of 60 cents per gallon (gal) in the past three weeks, according to data in the U.S. Energy Information Administration’s (EIA) Gasoline and Diesel Fuel Update. Regular retail gasoline prices averaged $4.09/gal as of Monday, October 7, the highest price for the state since mid-2014. Several refineries in the area are experiencing operational issues, which has limited gasoline production.
Gasoline prices in California are now $1.45/gal more than the U.S. average and $0.45/gal more than the West Coast average, the largest difference in these prices in EIA’s data series dating back to May 2000.
The West Coast region is a relatively tightly balanced petroleum market, so any supply disruptions tend to have larger price effects than similar issues elsewhere in the country. California also has more stringent transportation fuel regulations and higher transportation fuel taxes than most of the country, which contribute to its higher gasoline prices.
EIA’s study on West Coast Transportation Fuels Markets examined the gasoline, diesel, and jet fuel markets in the region. Although that study was released in 2015, most of the factors affecting West Coast markets have not changed significantly in the past four years.
After declining for several weeks, West Coast gross refinery inputs (refinery runs) fell to 2.24 million barrels per day (b/d) in the week ending September 27—the lowest weekly value since late October 2016—according to EIA’s Weekly Petroleum Status Report. In the following week, West Coast refinery runs rose to 2.51 million b/d, suggesting that some refineries may be returning to normal operation. West Coast refinery inputs were also relatively low earlier this year following several planned and unplanned refinery outages.
California’s recent gasoline price increase is the largest weekly change since 2015 when an explosion at the Torrance refinery and several subsequent disruptions led to higher gasoline prices in the state. California’s more stringent fuel specifications make replacing disrupted supply difficult.
Few other refineries in the United States are configured to produce the motor gasoline that meets California's specifications, so regional inventories and imported volumes are used to close the gap when refinery production is low. Following the outage at Torrance, California’s motor gasoline imports increased to more than 10 times its typical level.
As part of the weekly Gasoline and Diesel Fuel Update, EIA surveys gasoline and diesel prices to produce point-in-time prices as of each Monday morning at 8:00 a.m., local time. EIA publishes these values on the same Monday afternoon, making the Gasoline and Diesel Fuel Update one of the few same-day data series provided by a statistical agency of the U.S. government. EIA’s weekly gasoline price survey provides data for 10 U.S. metropolitan areas, 9 states, 5 U.S. regions (Petroleum Administration for Defense Districts), and 4 subdistricts.
Principal contributors: Owen Comstock, Hannah Breul
Tags: prices, gasoline, liquid fuels, California, states