Eyes are turning to California as gasoline prices near the $4-per-gallon mark, raising questions regarding how consumers will react if fuel prices cross that critical threshold.
The cost per gallon for premium fuel has already eclipsed the $4 mark in some locations, with prices for regular creeping up behind it. Bloomberg reported last week that prices experienced single-day jumps of 20 cents in Los Angeles and San Francisco as average prices rose to more than $3.90 per gallon.
West Coast oil stockpiles are down 4.2 million barrels since late July, the wire service reports, and the price hikes have been blamed on refining shortages, and with world markets reacting to Saudi Arabian refining capacity taking a blow due to its conflict with Yemeni rebels, even more uncertainty remains on the horizon.
Historically, $4 gasoline has been a tipping point for consumers when it comes to vehicle shopping habits. As of July, EV sales in California were still on the rise despite a decline in overall new-vehicle sales volume. Plug-ins, especially, have been hit hard. While PHEV sales volumes were almost even with EVs in 2018, they have fallen off precipitously in just the past year as EV sales have increased by an even larger volume.
2018 Kia Niro Plug-In Hybrid
This trend points as much to the strength of luxury car sales as it does the shift from hybrid and PHEV to full-on EV options when customers are presented with the opportunity to upgrade. The departure of the Chevrolet Volt also left a significant gap in the PHEV space, with much of its volume coming from coastal states.
As gasoline prices tick past $4 per gallon, all eyes will be on California's fuel-efficient buyers to see if their habits shift yet again. Will expensive gas influence your next vehicle purchase? Feel free to chime in below.