Californians Paying "Mystery Surcharge" On Gas


Gas prices highest since August 2015

California's high gas prices has some experts wondering why Golden State residents are paying so much more than people in other states. Even after taking into account California's higher than average state gas taxes, special blend requirements aimed at reducing pollution, and climate fees, UC Berkeley Professor Severin Borenstein says Californians are paying for a "mystery gasoline surcharge." 

The "surcharge" Borenstein refers to roughly translates into an extra 20 to 30 cents on every gallon used by California residents in the state, or about an additional $3 billion to $4 billion that is unaccounted for. 

Borenstein writes that until the Torrance refinery fire in early 2015, the difference in prices California paid as compared to the rest of the nation went up and down. But that all changed in February of 2015. 

That changed drastically in February 2015, and three years later it has not returned to the normal relationship of the previous 15 years. The price premium in 2015 was the worst, but 2017 was still more than twice as large as any year prior to 2015.

The extra payments since February 2015 have cost California drivers about $15 billion. And if the differential continues at its current level, which shows no sign of abating, it will cost Californians about $3 billion in 2018. Is that small potatoes?

A state committee was charged with looking into the mysterious surcharges last year, but were unable to come up with an explanation for the extra charge on California drivers. 

There are several theories floating around about the extra costs, from unscrupulous gasoline refiners, to complaints about the state's heavy regulatory burden that make business difficult in California. But so far, there's no proof to back either of those assertions up. 

Oil prices have jumped to a 3-year high amid worries about an escalating conflict between the United States and Russia in Syria. The benchmark for international oil prices rose to its highest level following a warning from President Donald Trump about a missile attack on Syria, whose has been backed by Moscow during the seven-year civil war. 

The average price for a gallon of gas in Los Angeles County rose by one-tenth of a percent today to $3.579 following three days of no changes. 

The average price is currently at its highest since August 29th, 2015 with the average price rising by a half-cent over the last week, and 13.2 cents higher than one month ago, and 54.5 cents greater than it was this time last year. 

The average price for a gallon of gas has risen by 42.9 cents since the beginning of the year. 

Orange County hasn't escape the higher prices either. O.C. residents saw the average price for a gallon of gasoline go up by nine-tenths of a cent, to $3.547, one day after going unchanged. The price of gas is currently at its highest since August 27th, 2015, 1.6 cents greater than one week ago, 13.2 cents higher than one month ago, and 53.1 cents greater than it was one year ago. 

The price of gas in Orange County has gone up by 43.1 cents since the beginning of the year.

Photo: Getty Images


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