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Gas Prices Reach Record Highs at the Pump Station
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Why are California's Gas Prices So High?

Filling up has been a budget-buster just about everywhere lately, but before you start complaining, make sure you're not talking to Californians. When it comes to who feels the most pain at the pump, that's a dubious honor they'll almost always win. 


As of Tuesday, the national average for a gallon of gas was $4.52. In California, it was a staggering $6.02 — the very first time it hit above the $6 mark, making it the most expensive in the nation. 


But why?


Several factors are at play, but one of the biggest is that California's emissions standards are the most stringent in the nation. The state mandates the use of a special reformulated gas that burns cleaner, causing less pollution. So while that's undoubtedly good for the state's famously smoggy air, it also means California has limited suppliers.


Another big issue: Geography. California has its own refineries, but they provide just enough fuel to meet statewide demand, according to the U.S. Energy Information Administration. Any issues, and "prices can increase substantially" — and it takes quite awhile for Gulf Coast or foreign refineries to help fill in the gaps thanks to California's West Coast location. Experts think there is probably some sort of production issue going on right now that is helping keep California's gas prices so high even as they drop elsewhere. 


Finally, there's the elephant in the room: Taxes and fees. California has a lot of 'em, and gas is no exception. The state has the nation's highest gas taxes by quite a bit, adding on an average of 68 cents to each gallon of gas. To add insult to injury, the state's excise tax for gasoline adjusts annually for inflation. Add in federal taxes, and Californians pay more than 86 cents in taxes on every gallon. 


As for fees, the San Jose Mercury News reports that on top of the surcharges associated with California's environmental standards, there's a "phantom" surcharge to the tune of 20 to 30 cents that "analysts can't seem to account for." The state investigated, and ultimately returned this very unsatisfactory answer in 2019: "California’s retail gasoline outlets are charging higher prices than those in other states.” D'oh.


California's lawmakers have floated various proposals to help bring down gas prices. Gov. Gavin Newsom wants to give residents $400 per vehicle and free public transportation for a few months. Others have called for a gas-tax suspension.


In the meantime? That Prius or Tesla is looking a lot more attractive. 


More from Cheapism:

Will This 10-Step Plan Bring Down Gas Prices?

The States With the Highest — and Lowest — Gas Taxes

21 Ways to Get Better Gas Mileage

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