WSPA works hard to ensure consumers have an adequate, reliable and affordable supply of energy and transportation fuels.
In California, and in other western states, the demand for energy is growing faster than supply. Nowhere is that disparity more serious than in California.
Global consumption of crude oil (and products) has continued to increase in the last few years. The U.S. Energy Information Administration forecasts additional growth in consumption through 2008.
Gasoline taxes in California are the highest in the country, according to API, about 63 cents per gallon. That's about 16 cents per gallon above the national average.
In California, gasoline consumption declined slightly in the past two years, according to the State Board of Equalization. The federal EIA has revised downward its gasoline demand projections, because “higher prices appear to have dampened oil consumption in a few countries, including the United States, in recent months.”
According to government sources, the number of refineries producing gasoline in California dropped from 32 in mid-1980s to 14 today. During that same period, population and gasoline consumption grew by close to 50 percent. California now consumes 43 million gallons of gasoline and 12 million gallons of diesel fuel per day.
The keep up with increasing demand, oil companies until quite recently imported an estimated 3.5 million gallons of finished gasoline every day in California to augment in-state refinery output.
So Why Does California Gasoline Cost More?
BECAUSE, according to API, gasoline taxes in California are the highest in the country, about 63 cents per gallon, about 16 cents per gallon above the national average. According to the California Board of Equalization, gasoline sales taxes generated $3.6 billion in revenue for the state in 2007.
BECAUSE California requires the cleanest burning gasoline in the world, and that cleaner-burning fuel costs more to produce.
BECAUSE demand for gasoline in California and surrounding states supplied by California refineries has been growing faster than California’s production capacity, requiring increased imports of gasoline and blend stocks.
BECAUSE California’s tight supply-demand balance and limited number (14) of gasoline-producing refineries makes its gasoline market more vulnerable to immediate impacts of supply disruptions.
BECAUSE California is a “fuel island.” No crude oil or petroleum product pipelines link California refineries to other sources of supply. All of the petroleum we import arrives here in ships that must travel from 10 days to 6 weeks to get here. Once here, imported crude oil, gasoline and other petroleum products must pass through an infrastructure that already is at or near capacity.
More Industry Issues