Why Do West-Coast Gas Prices Differ From Rest Of U.S.?


U.S. gas prices plunged last year, and have remained at several-year lows through the first month of 2016.

But they're lower in some places than others.

Starting in January 2015, West Coast gas prices became unglued from the rest of the country--and they remain notably higher than in other regions.

DON'T MISS: Why Electric Cars Make Sense Even When Gas Is $2 A Gallon (Dec 2015)

So far this month, the West Coast is the only region with average gas prices above $2.00 per gallon, according to a U.S. Energy Information Administration (EIA) survey of weekly retail gas prices.

On January 11, U.S. average gas prices fell below $2.00 per gallon for the first time since 2009.

But different regions fell below this marker at different times--and the West Coast still hasn't gotten there.

Traffic at the I-10 & I-405 interchange in Los Angeles, California (by Mario Roberto Duran Ortiz)

Traffic at the I-10 & I-405 interchange in Los Angeles, California (by Mario Roberto Duran Ortiz)

Enlarge Photo

Average prices in the Gulf Coast, Midwest, and Rocky Mountain Petroleum Administration for Defense Districts (PADD) dropped below $2.00 in October, November, and December, respectively.

East Coast prices slipped below $2.00 on January 4.

But as of January 11, the average price of gasoline on the West Coast was $2.63 per gallon.

ALSO SEE: Why Isn't Cheap Gas Helping To Boost The U.S. Economy?

That may be partially due to transportation costs. The West Coast PADD includes Alaska and Hawaii, two states that are somewhat removed from the national refinery infrastructure.

Then there's California, where gas always tends to be more expensive than in other parts of the country.

California is known for high gas prices due to high local taxes and fees, as well as stricter regulations that require use of a lower-carbon gasoline blend, notes The Atlantic.

Golden Gate Bridge, connecting San Francisco and Marin County, California

Golden Gate Bridge, connecting San Francisco and Marin County, California

Enlarge Photo

Only certain refineries produce this blend, tightening the supply for California drivers.

That supply became even more constrained after an explosion at an ExxonMobil refinery in Torrance last year.

The refinery was subsequently forced to operate at 20 percent capacity, which analysts believe has kept California gas prices high.

While West Coast drivers may not have received the full benefit, many consumers seem to have taken advantage of low gas prices last year.

Sales of SUVs increased as part of an overall boom in new-car sales.

This curtailed the steady gains in new-car average fuel economy that have occurred over the past few years.

[hat tip: Brian Henderson]

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