The recent surge in gas prices across America has been alarming; however, that of California seems to be high up the charts. Compared to New York, where even $5 a gallon is considered high, people living in California have to pay almost double for an equally full gallon.
According to the AAA website, the average price of gas in the state is $6.30, while the national average is $4.82. However, a Chevron gas station in Mendocino, north of San Francisco, recently charged $9.60 per gallon for regular and $9.91 for supreme unleaded gas. A station in Los Angeles was also reported to have sold at $8 per gallon.
Soaring Gas Prices
The Mendocino gas station is considered the most expensive in the nation and has been described on the County’s website as “an enchanted place filled with real, unspoiled California opportunities.” However, the high gas prices do not come from harsh reasons, as the owner of the Mendocino station and Schlafer’s Auto Body & Repair, Judy Schlafer, explained.
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Judy told SFGate that three months back, the same amount of fuel she currently buys at $50,000 sold for $30,000. She now buys 8,800 gallons of fuel at $50,000, almost double what she used to buy a few months ago- and she has to pay within ten days. She also said that her station is not the only one selling high, but others as well, despite the AAA statewide average being $6.31.
Implication Of The Increased Gas Fee
“I’m going to be lucky if I make the year with all the fees, the regulation, the payroll fees,” she explained. “If it continues the way it is, Mendocino won’t have a gas station next year.” The Head of Petroleum Analysis at Gas Buddy, Patrick De Haan, told SFGate– “Without much of a doubt, it’s the most expensive gas in the country.”
“Refinery capacity has diminished due to COVID. We don’t have as much ability to refine as much fuel as the market is consuming. Prices continue to climb, it’s absolutely amazing to see how high prices currently are,” De Haan added.
Other Factors Responsible for the Hike in Gas price
Oil prices have gone up consistently for six weeks in a row, with the benchmark West Texas Intermediate settling at $118 a barrel as of last Friday, which is 3.3% up. During the COVID-19 lockdown, demand for gas dropped, causing a slow production rate and quantity.
However, now that demand for gas is back, production has not caught up yet, causing scarcity and higher prices. Another factor involved in this price surge is the sanction on Russia by the US and some other countries. Russia is a significant producer and supplier of oil, but the sanctions took out up to one million gallons of oil daily from the world’s economy.
OPEC (Organization of Petroleum Exporting Countries) assured an increase in production from July to meet up with the demand and reduce the prices ahead of a busy summer season where more people are expected to be on the road.
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