CA Gas Nearly $2 More than Some States, and Saudi Arabia Wants to Push it Higher

With summer vacations approaching, California gas prices are the highest in the nation, and Saudi Arabia wants to make them even pricier.

A gas station in Grovetown, Georgia, sells regular gas for $3.129, Monday, June 5, 2023. (Special to GV Wire)

California drivers pay on average $4.87 a gallon compared to the national average of $3.55 as of Monday, according to the American Automobile Association.

Meanwhile, Mississippi has the lowest average price at $2.96 a gallon.

In Fresno County, drivers are getting a small reprieve, paying on average $4.78 a gallon. But bargain hunters can shave that price significantly. Use this link to find the lowest prices in the Fresno area.

The California Factor

Gas price reporting website GasBuddy.com shows a Valero station in Needles, California selling gas for $6.29 a gallon. Two miles away in Mojave Valley, Arizona, gas sells for $3.43.

California also has high gas taxes and fees. As the graphic below shows, when you buy a gallon of gas for $5.06 in the Golden State, nearly 24% of the cost ($1.19) is taxes and fees.

(California Energy Commission)

California only imports 3% to 7% of its gasoline supply. The 11 refineries in California produce 90% of the state’s gasoline and diesel, according to the California Energy Commission.

However, foreign sources make up 56% of crude oil imports to California. The 48 contiguous states provide 29% and Alaska provides 15%.

Saudi Arabia Cuts Oil Production, Russia Stands to Gain

To counter dropping oil prices globally, Saudi Arabian officials said they would begin cutting oil production by 1 million barrels a day beginning in July, according to the Associated Press.

Calling the reduction a “lollipop,” Saudi Energy Minister Abdulaziz bin Salman said that “we wanted to ice the cake.” While the cut in oil production is temporary, the energy minister said the country could decide to extend the cut, doing “whatever is necessary to bring stability to the market.”

The cut would likely lead to short-term jumps in oil prices, said Jorge Leon, senior vice president of oil markets research at Rystad Energy.

Saudi Arabia made the decision independent of OPEC+. No other OPEC+ nations have announced cuts in oil production.

The Saudi production cut could add to the prices that are helping Russia pay for its war against Ukraine. Russia has found new oil customers in India, China, and Turkey amid Western sanctions designed to limit Moscow’s crucial energy income.

But not being able to trade in dollars has limited Russia’s ability to profit from its oil exports.