By on October 24, 2019

On Tuesday, California Governor Gavin Newsom responded to a new report claiming oil companies have been overcharging customers over social media.

“[California] drivers have paid an average of 30 cents more per gallon. There’s no identifiable evidence to justify that,” Newsom said. “I’m demanding an investigation. If oil companies are engaging in false advertising or price fixing — legal action should be taken.”

With California leading the charge against the federal government’s proposed fuel economy rollback, Newsom’s words are a bit of a faux pas. While we agree that companies should not be engaging in price fixing, California’s high fuel prices are largely its own doing. Newsom’s claims completely ignore this rather obvious fact — calling his ability to effectively negotiate the national fueling fracas into question. 

We weren’t the only ones to notice, either. Twitter users immediately responded to the governor, with many acknowledging that Californians actually pay the highest gas taxes in the whole country (the state surpassed Pennsylvania this summer). Equally bizarre is Newsom’s outspoken support of the state’s 2017 gas tax increase and condemnation of 2018 ballot measure aimed at repealing it. He has to know that’s why fuel prices are so much higher there… right?

The California Energy Commission (CEC) report Newsom referenced was something he commissioned earlier in the year. The goal was to determine why Golden State residents were paying so much more for gas than people in other parts of the country. However, the CEC report determined “the primary cause of the residual price increase is simply that California’s retail gasoline outlets are charging higher prices than those in other states.”

It also outlined how much more Californians are being charged via regulatory measures and fuel taxes. The report estimated that California’s gas prices were $0.75 higher than anywhere else in the country last year, and over half of that appears to be directly attributable to the state’s taxes, low-carbon fuel requirements, and greenhouse cap-and-trade program. The West Coast, which is also subject to higher crude prices than other parts of the country, ran into supply problems this year as local refineries swapped over to special blends not used in other states.

While that doesn’t automatically exonerate Big Oil from the suspected price fixing, it also doesn’t support any accusations against them. Ultimately, this forced Newsom to kick the can down the road to Attorney General Xavier Becerra. The California Energy Commission did the same:

The CEC does not have any evidence that gasoline retailers fixed prices or engaged in false advertising. Moreover, the CEC lacks the expertise to determine whether such behavior occurred. The California Department of Justice is well equipped to conduct an appropriate investigation.

The whole thing is a little confusing. Newsom appears concerned with the high prices Californians have to pay at the pump but completely overlooks the core reasons for the problem. This offers plenty of ammunition to his political opponents in the gas war, especially with the Environmental Protection Agency repeatedly accusing the state of being mismanaged — and creating new ecological issues while failing to effectively address existing ones. At least, that’s how EPA Administrator Andrew Wheeler tells it.

At this point, we don’t expect either side to play fair and take anything at face value. Still, this will be a black eye for California, and it could have been avoided entirely if state leadership bothered to address why we need fuel taxes, or if it promised to tamp them down in the future. Instead, the governor responded to public complaints of high fuel prices by pointing the finger at Big Oil with no proof.

[Image: Michael Vi/Shutterstock]

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82 Comments on “California Governor Demands Investigation Into High Gas Prices...”


  • avatar
    Vulpine

    The first question that would come to my mind is, “What are the state’s fuel taxes as compared to other states?”

    • 0 avatar
      dukeisduke

      Gas tax is 47.7 cents per gallon. The lowest is Alaska (14.65), the highest is Pennsylvania (57.6).

      http://worldpopulationreview.com/states/gas-taxes-by-state/

      • 0 avatar
        Vulpine

        Hmmm… Considering that I live right across the line from PA in MD, I’m aware that PA gas tends to run right at or just above $3/gallon, if CA is running $4/gallon, someone is certainly gouging the market.

        • 0 avatar
          Sigivald

          In a normal market for a fungible good, that would be a reasonable assumption.

          Problem is, California, last I checked, mandates a *special blend of gasoline* that other states don’t.

          So refiners need to formulate “for California” and just California, for that output.

          Guess what that does to prices, also in any normal market?

        • 0 avatar
          TrailerTrash

          well, not exactly.
          see, living in California is expensive even without using gas.
          a station in Los Angeles has a hellava lot more cost for doing business in the tax and tax some more state than over in PA.
          so sayin or suggesting it is maybe criminal is silly.
          the real criminals in California are the leftist and their polls.

      • 0 avatar
        R Henry

        California sales tax is added to the separate gasoline tax, and Federal tax on top of that.

    • 0 avatar
      highdesertcat

      Very high, but varies by region and location. Highest prices I found were in Bishop, northern, CA. At the time it was $4.759/gal RegUnl.

      Lowest prices I found were at the Shell station on Balboa in North Clairemont suburb of San Diego, CA, but they were still more than a dollar higher than my last fill’r up at the Shell in Yuma, AZ.

      I had used up the spare 20 gals in my four Walmart gas jugs, and bought just enough gas to get me back to Yuma driving back from San Diego, roughly 180 miles @15mpg, so ~ 13 gals. IOW, I paid $13 more for gas in CA than I would have to in AZ, for the same amount of gallons.

    • 0 avatar
      thornmark

      state and federal data show CA fees and taxes make for nearly $1 per gallon, while the average U.S. gas tax amounts to just over 52 cent per gallon

      the state’s Low Carbon Fuel Standard also makes the fuel more expensive and difficult to produce and makes its price very volatile since the formula changes and apparently is only used in CA

      few refineries outside the state are equipped to produce it and when there is a shortage it must be trucked or shipped in because there aren’t pipelines from out of state – also increasing the cost

      • 0 avatar
        Vulpine

        That still doesn’t account for the nearly $1 difference between Pennsylvania (57¢/gallon tax) and California (47¢/gallon tax) Keep in mind PA also has a high sales tax of near 10%, so the legislative fees are roughly equal between the two states, meaning CA pricing should be 50¢ higher at the most. This is gouging, either by the oil companies or the independent stations, which normally sell at about 15¢ to 20¢ less than name brand.

    • 0 avatar
      SaulTigh

      https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States#/media/File:Fuel_taxes_in_the_united_states.png

      Nice, neat bar graph.

  • avatar
    ToolGuy

    Best. State. Ever.

  • avatar
    JimC2

    I’m just here for the comments.

  • avatar
    dukeisduke

    Their gas tax is 47.7 cents per gallon, which doesn’t explain why gas there costs about twice as much as everywhere else. Here in the DFW area, regular E10 (87 octane) is running from $2.199 to $2.299 now. Our gas tax (State of Texas) is 20 cents per gallon.

    http://worldpopulationreview.com/states/gas-taxes-by-state/

    • 0 avatar
      indi500fan

      Socialism seems to be trendy these days.
      And a lot of talk about the state of Cali owning the power grid and generating plants.
      Maybe the Gov would like some refineries to go with his electric company and high speed rail empire? Seemed to work great for Chavez and Co down in Venezuela, right?

    • 0 avatar
      TrailerTrash

      really?
      you are comparing the cost of doing business in DFW with California!?
      Oh, puleeze.

    • 0 avatar
      Lorenzo

      It’s not just the tax. the gasoline formulation is unique to California, the refiners have to pay for a cap and trade system that adds 20 cents to the cost. There’s a separate tax to pay for gas station storage tank removal and remediation (digging up the soil around the tank and disposing of it)that adds another 20 cents to the cost.

      The state sales tax is imposed on gasoline after all the other fees are added. Add the high cost of property taxes on gas stations (all city/county property taxes go to the state with a tiny frction returned to local sources). Local business licenses and permits the locals use to make up for the lost property taxes are added to the cost of doing business.

      There are fines for the most trivial violations of environmental regulations. The state EPA will fine a gas station for letting a hose drain any volume of water into a street gutter. They’ve actually fined the state highway department for a broken sprinkler on highway landscaping!

      It’s not just the tax on gasoline, but the incredible expense of doing business anywhere in the state, largely because the state government vacuums up local revenue, and local and county government imposes fees and permits to make up for the loss.

      That’s all in addition to sky-high liability insurance, unemployment insurance, and state-mandated holidays, sick leave, and maternity leave that make hiring an expensive proposition. Once hired, businesses need a full time office to keep up with reporting requirements to several boards and commissions.

      The authors of California’s Proposition 13 specifically cited a passage in the Declaration of Independence: “He has erected a multitude of offices and sent hither swarms of officers to harass our people and eat out their substance”. That’s the current state of affairs in the “People’s Republic of California”.

      • 0 avatar
        karonetwentyc

        “The state EPA will fine a gas station for letting a hose drain any volume of water into a street gutter.”

        If memory serves, there was a Chevron Station in Burbank, CA that was fined by CalEPA because the A/C drain on an HVAC unit over the shop had condensate running from it to the gutter.

        Let that sink in for a moment: A/C condensate. Water. Not even water that was imported into the State; water that just happened to be removed from the air around it.

        California’s government is freaking insane.

  • avatar
    PrincipalDan

    I got premium for under $3 per gallon a couple of weeks ago here in NM. I was very happy.

    Also got comped a cup of coffee cause I’m part of their rewards program (what I would have bought that gas anyway.)

    Life’s good.

    Back to the subject. Doesn’t California require special formulations of gas year-round? That would be a likely culprit. Along with higher taxes along with higher overhead for operating a gas station compared to other states.

    • 0 avatar
      Fred

      Yea I pay $4.10 for 91 octane here in California, compared to less than $3 I paid 3 years ago for 93 in Texas. Then again, I’m retired now and don’t have to drive 60 miles a day back and forth to work.

    • 0 avatar
      SaulTigh

      Under $3 premium here too, along with $2.22 a gallon 87 octane, which all my vehicles run on. Only spent $146 on fuel last month for 3 vehicles.

      • 0 avatar
        PSX 5k Ultra Platinum Triple Black

        Living in DC, I’ve seen the gas prices in DC, Montgomery county Maryland, West Virginia, and Virginia. Surprisingly the gas is typically the most expensive in West Virginia, and the cheapest in Virginia.

        In DC and Montgomery county, the prices can swing drastically depending on what side of the street you fill up on. Some stations (same brand of gas even) across the street from each other can have gas prices that are higher by $1 or more. The local news interviewed some of the station owners that had gas $1 more than the station across the street, asking why they charged so much more. All the owners had the same response, “Because we can”.

        And they are correct, I see just as many people filling up at the station with the more expensive gas, as the cheaper station across the street.

        • 0 avatar
          Vulpine

          Part of that one, PSX, is the convenience factor. Did you happen to study the traffic patterns around those so-differently-priced stations? Let’s say, just for an example, you need to go eastbound on the street you name. It’s an easy right turn into and out of the station that’s more expensive while a left turn across heavy traffic getting in AND back out might add ten minutes just to the fuel stop. I have seen this happen, though not very often (I don’t drive in DC, I let others do the driving while I’m taking the metro.)

          So, “because I can” does make sense in some places but it’s also pretty simple to start a gas war (each station trying to undercut another) when access to all the stations is easy.

    • 0 avatar

      The state may require a special formula (Waving from NY, where non ethanol gas is 100 miles away) but this is shenanigans from the oil companies. There is always one refinery short….repairs, etc which is used to bump the price of the gas. Think what Enron did …

  • avatar
    Hummer

    NCs governor needs to look into this as well, I had to pay $2.22 yesterday evening! Premium was a jaw dropping $2.54. We need a national effort to bring these prices down.

  • avatar
    dukeisduke

    Prices can depend on a lot of factors, like refining capacity and access to refineries, distribution methods (trucks versus pipelines), and special blend requirements.

  • avatar
    cicero1

    “There’s no identifiable evidence to justify that,” Newsom said.” Yeah Right. The Wall St. Journal had a good article on this yesterday. In short its the CA government’s fault: CA banned fracking; stopped any attempt to build pipelines; mandates many grades of gas; high taxes; prevents easy access to TX and US produced oil – thus CA refineries buy at Brent prices not West Texas (much cheaper)prices and CA makes it impossible to expand a refinery.

    The real question is not why gas, like housing, and many things are more expensive in CA, but where is the breaking point when people wake up. $10.00 / gallon and average rental price $5,000.00/month?

    Finally, only a fool believes Newson and the rulers in CA think $5.00/gallon is bad – their goal is Venezuela with desert.

    • 0 avatar
      Sigivald

      I mean, we can think banning fracking is dumb [I do!], but it … won’t have much affect on *gasoline prices*, since fracking’s for natural gas, not crude oil, I think?

      (The other ones are all pretty much on, as I understand it.)

      • 0 avatar
        DedBull

        Fracking is used for both natural gas and crude oil, significantly the Bakken (ND) and Eagle Ford (TX) shale plays are big oil producers driven by fracking and horizontal drilling.

      • 0 avatar
        ptschett

        It can be for both gas and oil. Fracking and horizontal drilling were what enabled the Bakken in North Dakota / Montana to be productive of both (people knew there was oil there by the 1950’s, but it took till recently to figure out how to effectively get at it.)

      • 0 avatar
        JimC2

        What DedBull, ptschett, and cat already said, plus the simple economics that the different kinds of energy commodities all affect each other.

  • avatar
    SCE to AUX

    The Governor’s protestations are laughable.

    Gas price collusion has been investigated on and off for 45 years, with no evidence of it.

    Usually ignored is the idea that if someone could sell gasoline more cheaply, why wouldn’t they do so? At this point, most gas stations make the real money on their convenience stores, not the gas. Even back when I was pumping gas for a living (ca 1981-2), we only made a few cents per gallon. Raising the price only drives customers away.

    On the other hand, Americans will pay *anything* for a gallon of gas.

  • avatar
    duncanator

    I just fueled up my car during my lunch break and the price I paid was 4.44 per gallon of premium unleaded – Sacramento. I usually try to get my gas at Costco where it’s always cheaper, but was short on time this time around.

  • avatar
    Fred

    Just read an opinion article and their are several reasons, high taxes, cleaner fuel, higher cost to do business here and rumors of refineries and stations conspiring to fix prices. Some areas suffer, like Eureka, because they have to haul gas in by truck over long distance. No easy solutions here.

  • avatar
    Vulpine

    Regular is around $2.35 in northeastern Maryland right now… plus a bit if you go with one of the actual oil company brands.

    • 0 avatar
      highdesertcat

      I filled up at the Shamrock in El Paso, TX, yesterday and it was $2.299/gal RegUnl for my daughter’s 2013 Odyssey. And a 48oz cup of Coke was 85-cents, incl tax.

      Life is good!

      • 0 avatar
        dal20402

        48 oz of Coke has nearly six ounces of pure sugar in it. I can’t imagine how I’d feel if I drank that.

        • 0 avatar
          SaulTigh

          Jittery, probably. Insulated cup and it will last all day.

          • 0 avatar
            highdesertcat

            SaulTigh, if you’re familiar with Howdy’s, an outlet very similar to 7/11 and Alsup’s, they had 64oz REUSABLE insulated cups that they gave out to their regular customers for FREE, like my crew and I when we were working, and hundreds more like us.

            So every morning on our way to work we stopped at Howdy’s filled up that 64ox insulated cup with Coffee doctored to our own tastes with milk, sugar, Irish Creme or Hazelnut or Vanilla, whatever, and after lunch we’d fill up those cups with Coca-Cola to take us through the afternoon heat. They even had a sink where we could wash out our Howdy’s cups, wash our hands. Great place!

            I pretty much did that for thirty years while maintaining and fixing those rental properties for my FIL.

        • 0 avatar
          highdesertcat

          dal20402, and I slurp a lot of it when filling it up, topping it off, before I pay for it.

          After I quit working at the end of 2015 I gained ~65 pounds mostly around the gut, but I’m still healthy according to three different doctors (VA/Svc Connected, Mil/TriCare, and Civ/Medicare).

          Sugar and caffeine are goooooooood, been doing both all my working life, or maybe I just have good genes.

    • 0 avatar
      TMA1

      That’s what I’m seeing in the DC suburbs of Maryland. But premium 93 usually goes for about $0.75 more.

  • avatar
    Jeff S

    I thought California wanted to discourage more ICE vehicles. If the goal is to reduce the number of ICE vehicles then raising the price of gasoline would accomplish that goal not lowering the price. Even if the price is lowered on fuel California will raise the fuel tax and most likely the prices would go up. I am willing to bet that Governor Newsom is less interested in saving the consumer money and more interested in diverting attention away from California’s high taxes and fiscal problems. If California wants to increase efficiency standards and reduce traffic congestion the best way of accomplishing that would be to raise the fuel taxes. Could start with raising the fuel tax to $0.50 a gallon and then go to $1 a gallon and if that is not enough then continue to raise the fuel taxes. The result would be less vehicles and less population.

    • 0 avatar
      highdesertcat

      Jeff S, if you have ever been in LA or San Diego, those places are deluged with illegal aliens, homeless and other poor people driving decades-old rolling wrecks they call cars.

      Sometimes the smell of leaking and oozing gasoline from these vehicles is so strong you would not want to light a match in the vicinity of that vehicle.

      I was born in Huntington Beach, CA, and spent my first 18 years of living in SoCal. It breaks my heart to see what a slum my old haunts have become.

      Worse yet, not only are many of the streets littered with trash, they’re also littered with cars, many of them who still function as someone’s daily driver.

  • avatar
    APaGttH

    As someone who writes for the O&G industry and has written for TTAC on this very topic, coupled with a first-hand focus group of one this past month…

    First of all, you answer your own question in a way when you wrote:

    “…California’s gas prices were $0.75 higher than anywhere else in the country last year, and over half of that appears to be directly attributable to the state’s taxes, low-carbon fuel requirements, and greenhouse cap-and-trade program…”

    It accounts for about half of the 75 cents difference. I’m not going to run the math to get specific, but the “about half” passes the sniff test.

    When it comes to motor fuel costs in California, it is a tale of two states for supply and demand. The first part of the state is the very northern half along the border of Oregon down to roughly the northern edge of the Napa region ahnd then east to Redding. Most of the fuel from this area comes from refineries north of California, is almost a closed loop, and largely dependent on North Slope crude from Alaska. The rest of the state is supplied from oil brought in from pipelines through the desert southwest, and their own refining facilities from the Bay Area south.

    This is an important distinction because it explains part of the reason why fuel on the west coast costs more. There are no significant pipelines that support the Pacific Northwest of Washington, Idaho, most of Oregon, and that above-outlined strip of northern California. It isn’t a regulatory issue, it is an engineering and cost issue due to moving liquids at scale up and over the Rocky Mountains. This closed-loop means that Pacific Northwest is even more sensitive to regional disruptions than other parts of the country.

    BUT

    As anyone who lives in the Pacific Northwest can attest, it also means it is utter BS when refineries in the Golden Triangle shut down due to flooding or hurricane activity, and the price of gasoline spikes in Washingon, Idaho, or Oregon 30 to 50 cents a gallon. The reality none of that supply reduction impacts points east or west. So, anyone who has lived in this region, and understands upstream supply for the oil industry also knows, the Pacific Northwest gets shafted repeatedly.

    Now for the rest of California. It is well documented that Shell wanted to close what became the Flying J refinery in Bakersfield to tighten supply. I remind the B&B that California issues multiple waivers for air pollution requirements to Shell and Flying J to keep the refinery running. In the end, Flying J also shut it down in relation to their bankruptcy back in 2008. That loss of production has artificially tightened supply despite the fact internal documents showed the refinery was profitable for Shell and Flying J, and the state of California was willing to almost bend over backward to keep it running.

    Now, for my focus group of one. I’ve had to drive from Seattle to Sacramento twice this month. Mom had a stroke and it has been trying. The MAGA set, of course, is more than ready to enjoy this schadenfreude but let’s go back to the TTAC quote.

    “California’s gas prices were $0.75 higher than anywhere else in the country last year, and over half of that appears to be directly attributable to the state’s taxes, low-carbon fuel requirements, and greenhouse cap-and-trade program.”

    When I arrived in California for trip one, the cost of gasoline at the station closest to my hotel (again, focus group of one) was $3.59 a gallon. This was about 30 cents a gallon more than Washington, and about 50 cents a gallon more than Oregon. I can explain that difference away simply on taxes.

    The end.

    When I returned three weeks later, the same station was $3.99 a gallon, Oregon was around $3.19 to $3.29 a gallon, and Washington was $3.29 to $3.39 a gallon.

    IN three weeks.

    This simply can’t be explained away as, well, it’s taxes. At least for the Pacific Northwest region, it also can’t be explained away due to “supply interruptions.” If there was truly a supply interruption that impacted the entire west coast, Washington and Oregon would have felt it too, in a similar trend line to the northern tier of California.

    From my view, and point of expertise, the entire increase from the month of October, when fuel prices generally decline let us remember, don’t add up in the state of California and aren’t explained away by taxes.

    • 0 avatar
      R Henry

      @
      APaGttH

      “The reality none of that supply reduction impacts points east or west. ”

      If you think in terms of local markets, this is true. Petroleum products however are traded on global markets. A shortage in one production area increases demand from other regions…so think of Supply and Demand not in terms of locales but worldwide. Obviously, for refined products,. the cost of transportation for finished products is very high, so there a transportation cost factor which creates some isolation in local markets.

      • 0 avatar
        bullnuke

        The transportation costs as well as dependency on the local west coast refineries were the common reasons trotted out during high fuel cost grumbling in the late ’70s and into the ’80s in California. Saw several “investigations” on the local San Diego TV channels about the cost of gasoline back then and these reasons were used fairly routinely. It was pretty odd to have the higher prices with all the oil wells pumping away 24/7 in Long Beach, one in the Bank of America branch parking lot as well as several producing rigs out in the harbor camouflaged with multi-colored plastic paneling.

        • 0 avatar
          thx_zetec

          Yes there are oil wells in Cali – I see them pumping away when I visit LA. But oil production is nowhere near enough, Ca has to import most of their oil. This is like saying someone who works in fast food can afford a brand new Mercedes – ***I saw them get paid! they have money!**

          I am always amazed how so many people know with great certainty what gas should cost.

    • 0 avatar
      FreedMike

      Wow, a comment full of solid reasoning. Imagine that.

  • avatar
    indi500fan

    You’d think with all those Teslas on the road, the demand for gasoline in Cal would be diminished and gas wars abounding. Maybe the gen sets they use to power up during the fire prevention blackouts is is taking up the slack?

  • avatar
    R Henry

    The timing on this is very clear. Newsom is diverting attention from his treachery.

    Just recently, Governor Newsom issued an Executive Order diverting income from the recently enacted (and Hated!) gasoline tax, which was designated, by law, for road maintenance and construction, bike lanes, etc. The money collected from this tax has been stolen by the Governor to fight “Global Climate Change” —Newsom’s personal obsession. I shyt you not!

    Notice how recent the story is: https://www.latimes.com/california/story/2019-10-15/california-gas-tax-revenues-all-sides-grumble-gavin-newsom-plans

    The political monoculture in California is producing deep, profound corruption and malfeasance.

  • avatar
    bullnuke

    Were was Newsome years ago when the same sort of differential in per-gallon regular fuel pricing also existed between California and the other 49 states? Gasoline in Vallejo was $.065 or so in 1970 when I reported to Nuclear Power School; back home in Ohio it was $0.31. When I reported to my ship in Long Beach in 1974, gasoline was $0.75 or so with Ohio at $0.40 and there were no “odd and even days” outside California. When I left at retirement in 1992, gas prices in San Diego County were $1.42 and, in Ohio the price was $0.88. Gas has always been somewhat higher in California during my lifetime and I believe a lot of the difference is much like the price of real estate there – things tend to be priced at what the local market will bear. The higher taxation rate and the higher cost of required boutique fuel blends just adds icing to this cake. This is a big nothing-burger and more of a “Hey, look at me fighting for all you little guys!” political blabber.

  • avatar
    krhodes1

    Not CA, but I ran into a bit of likely gouging in FL Wednesday. Needed to fill the tank of my Fiata on the way to the airport. Stopped at random station near the highway entrance. Regular was $2.29, as expected, the going rate around my area. Premium was *$3.89*! And mid-grade was $3.69.

    W. T. F.? Occasionally the spread from regular to premium gets a bit egregious in my area, but I have never seen more than $.80-.$90 spread. So I splashed just enough in to get to the airport and back of regular and will see if it is everywhere or just that station when I get home tomorrow. I haven’t had to buy gas since getting back from my summer place in Maine a couple weeks ago.

  • avatar
    Fliggin_De_Fluge

    Thanks, Trump.

  • avatar
    Jeff S

    Ever since I can remember California has always had higher gas prices. Reality is that if you choose to live in California then you accept the higher prices or you can move. Add extra requirements for cleaner fuel and efficiency standards different than the majority of the rest of the country then costs will be higher. California has gotten too expensive for the average person to buy a home and it is getting too expensive for many to live there. The solution is to move if you can to a more affordable state but don’t expect the same level of Government services or require the same level of Government or you will bring the same problems to that state that California has otherwise stay in California and don’t complain.

  • avatar
    stuart

    There is an academic named Severin Borenstein who studies gas prices; he’s been whining about CA gas for several years. He notes that A) CA reformulated gas is more expensive to refine, B) CA taxes are very high, and C) the price spikes when a refinery shuts down. But when you factor all of those in, the retail price is even higher. Here’s an op-ed that explains his theory:

    https://www.mercurynews.com/2017/10/29/opinion-mystery-ca-gas-charge-cost-families-1200-so-far/

  • avatar
    stuart

    To emphasize, Prof. Borenstein notes that from 1996 through 2015, CA gas prices could be entirely explained by factors A, B, and C, yet after one refinery spike in February 2015, the price of gas rose even higher than A+B+C would support. There’s a graph in his op-ed piece that’s pretty compelling.

    IIUC, the CA government has finally noticed Prof. Borenstein and his theory, and thus the research $$$ to see if he’s right.

  • avatar
    ToddAtlasF1

    Is Gavin Newsome as much of an imbecile as his constituents? Gavin says yes! The difference between the direct regulatory costs and the total price differential can be attributed to the higher cost of living that results from high energy costs. There’s nothing more regressive than energy taxes. They make necessities more expensive and the poor spend a higher percentage of their money on necessities than wealthy people do. Ergo, energy taxes obliterate the standard of living of the working classes. A majority of Americans are now too brainwashed to wrap their Pedocrat-poisoned minds around this simple fact. Is Gavin another puppet or a demon? He’d like you to think he is a victim of evil instead of its instrument. B.S.

  • avatar
    Jeff S

    I don’t really know that much about Governor Newsom but I do know something about politicians and my opinion is that this is less about price gouging and more about placing the blame on someone else or ambitions of a politician seeking a higher office.

  • avatar
    aja8888

    What? gasoline is STILL sold in Ca? I thought everyone had a Tesla…. right?

  • avatar
    thx_zetec

    I consider Newsome as big embarrassment as Trump.

    Ca has had higher gas prices for decades, let me ask you this. **WHY CA??!?!** come on these greedy oil barons surely could charge high gas prices everywhere, right? Why do they only pick on liberal democratic states? Since Republican ruled states are controled by evil businessmen, then wouldn’t you expect higher prices in Texas and Georgia? (as some have noted, prices higher even accounting for taxes). I guess they are more cruel than greedy, they’d rather stick it to Ca because they resent Ca being more morally upright.

    Simple economics – if you restrict supply (hard to build refineries, boutique blends, etc) then supply reduced relative to demand and prices rise. It does not matter if if raw material same price – prices must rise in free market, or lines and shortages (even worse). Yes refinery owners can make more money in Ca capacity is politically limited – of course I would also charge more in this position and so would just about anyone. Regardless the real issue is politically limited supply – again high prices is least-worse way of dealing with democratic rule.

    Ca is a one party state – Newsome has to deflect criticism and blame big-oil.

  • avatar
    Jeff S

    “if you restrict supply (hard to build refineries, boutique blends, etc) then supply reduced relative to demand and prices rise. It does not matter if if raw material same price – prices must rise in free market, or lines and shortages (even worse).”

    Agree. California needs to become its own country and leave the rest of us alone. Yes I understand California’s economic impact and California’s need for more stringent clean air standards but after a while one gets sick of their complaining and forcing their agenda on the rest of us. If Newsom really wants to do something about the higher fuel prices then California should sue the oil companies and the retailers. Newsom needs to either do something or shut up.

  • avatar

    Albert Speer: “Who built all these munitions plants?”

  • avatar
    FreedMike

    Wow…glad I skipped this thread.

  • avatar
    IBx1

    hahahahhahaha

    Oh wait, he’s serious, let me laugh even harder

    HAHAHAHAHAHHAHAHAHAHHAHAHA

  • avatar
    -Nate

    “asking why they charged so much more. All the owners had the same response, “Because we can”. ”

    “Gas price collusion has been investigated on and off for 45 years, with no evidence of it.”

    ” Raising the price only drives customers away.”

    …..Followed by the usual alt right whiners who envy California and so take any opportunity to lambast it and take childish dishonest pot shots instead of being grateful that Californians all pay more Federal taxes to prop up the bankrupt red states….

    In reality, the gasoline prices are only excessive because the gop deregulated the pricing, that’s it .

    True in the 1970’s when they did it, claiming it would make all fuels cheaper, almost free ! (like electricity and insurance, remember ? of course you don’t, the truth scares you witless) .

    If you’re envious of the substantially better life we have in California, stop whining and LEAVE then S.T.F.U. and enjoy your miserable bankrupt red states poverty life .

    -Nate

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