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Who Bears Some Blame for High CA Gas Prices? Look in the Mirror
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By Bill McEwen, News Director
Published 2 weeks ago on
May 28, 2024

A "mystery surcharge," too few gas stations, and the unwillingness of Californians to drive a few blocks, or even across the street, to save 40 cents a gallon all contribute to the state's high gas prices, says a UC energy expert. (AP File)

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UC Berkeley economics professor Severin Borenstein knows as much as anyone about California gas prices.

Severin Borenstein

“If you’re buying 10 gallons of gasoline, and you’re unwilling to drive a couple blocks to save $6 on that, it does say something about how much you really care.” — Severin Borenstein, UC Berkeley economics professor

In fact, he came up with “mystery gasoline surcharge” to explain the difference between the expected price after accounting for California’s taxes and fees and the higher price at the pump.

In a recent interview with Politico, Borenstein said that in addition to the mystery surcharge, the state’s high gas prices also reflect the unwillingness of drivers to search out stations with lower prices.

“If you go around the country and you look at the dispersion of prices among stations near one another, California is just a huge outlier,” he said. “You just do not see stations across the street from each other that are 40 cents a gallon different in most other parts of the country. In other parts of the West, the price variation is a few cents. You do not see 40-cent differences. Sometimes in California, it’s more than 60 cents (higher) a few blocks away

“So in some sense, whose fault is that? If drivers are unwilling to drive a few blocks to save 60 cents a gallon, we definitely have a competition problem. If you’re buying 10 gallons of gasoline, and you’re unwilling to drive a couple blocks to save $6 on that, it does say something about how much you really care.”

Too Few Stations, Not Many Off-Brands

Borenstein also said that California should clear the bureaucratic hurdles so that more gas stations are built.

“I think we should stop putting restrictions on building new gas stations, which is basically protecting incumbent gas stations from competition.”

He also noted that California has “far fewer off-brand stations” than other states.

Read the complete Politico interview at this link.

 

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Bill McEwen,
News Director
Bill McEwen is news director and columnist for GV Wire. He joined GV Wire in August 2017 after 37 years at The Fresno Bee. With The Bee, he served as Opinion Editor, City Hall reporter, Metro columnist, sports columnist and sports editor through the years. His work has been frequently honored by the California Newspapers Publishers Association, including authoring first-place editorials in 2015 and 2016. Bill and his wife, Karen, are proud parents of two adult sons, and they have two grandsons. You can contact Bill at 559-492-4031 or at Send an Email

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