By Eric Heinz
Southern California enjoyed cheaper gas while it lasted, but the state’s supply is not up to par with the rest of the nation, according to petroleum analysts.
Allison Mac, petroleum analysts with gasbuddy.com for the western United States, said because California hasn’t produced enough petroleum, energy reports had retailers scrambling to change prices.
“These big increases started (July 9), and the main Energy Information Administration report showed, on July 8, we were below comfortable levels as to how much supply we have in Southern California,” Mac said.
Mac said the population in California has been growing year after year, meaning the demand has been higher with the production unable to keep up.
“The gas market basically freaked out and prices went up,” Mac said. “Wholesale prices rose $1.27 per gallon. Oil is still cheap. It’s economics 101, but if you think about it, prices dropped in Southern California from May until now. Things were looking good; we survived Memorial Day Weekend and survived Fourth of July, and there was an increase in use, and we were using a lot of gas, so that could be an explanation to why our supply is lower.”
Another factor as to why California has some of the highest gas prices in the nation is because it has one of the highest gas taxes at about 60 cents per gallon. That is coupled with the mandatory unique blend of gasoline the state uses, which costs more to produce but emits less.
Mac said the prices are likely to remain steady in the foreseeable future, unless California starts importing or producing more petroleum.
“Imports started coming in March, and we said we needed to supply cushion,” Mac said. “Then this report came out saying that we were getting no imports.”
On Wednesday, Mac said prices were stabilizing but not going down.