Why California has some of the highest gas prices in the country
California has some of the highest gas prices in the nation but some experts and the governor say prices here are much higher than they should be.
"This is just price gouging," said Governor Gavin Newsom.
Newsom has demanded action because of the rising prices which have cost Californians tens of billions of dollars since 2015.
"That adds up, since 2015, to over $40 billion in extra payments Californians have made due to what I call the mystery gasoline surcharge," said UC Berkley professor Severin Borenstein.
Borenstein heads the Energy Institute at UC Berkley and has been tracking prices since the 1980s.
"California always has higher prices than the rest of the country," he said. "That is in part because of higher taxes and environmental fees.
However, Borenstein said California's special blend typically only costs around 83 cents more a gallon.
"We are, these days, more than $2 a gallon above the rest of the country," he said.
However, it is unclear where the extra payments go.
"We really need a serious investigation into why that extra amount that arrived in 2015 has never disappeared," Borenstein said.
Borenstein said that while the prices at the refinery seem appropriate, it seems that the increase comes somewhere in the process when the gas leaves the refinery and goes into consumers gas tanks.
"The branded gasoline, the refineries have a lot of control over those downstream sectors and are collecting a lot of that revenue," said Borenstein.
In fact, Borenstein said the refineries control 50% of the retail market at the pump too — at least in California since we don't have enough off brand stations to bring down the price.
"We're kind of trapped," said driver Joel Berti. "It's like going to a baseball game and you gotta eat — you're stuck there.
However, the governor said we shouldn't be.
"They can get away with it their fleecing me and taking advantage of you," Newsom said. "Every one of you, every single day."
Borenstein suggests that the state should consider bringing in a non-Californian blend when prices drastically deviate from the national average. He also recommended a state gas reserve or just more oversight so big oil companies don't get behind the wheel and drive away with our cash.
