By Travis Gillmore
While California is known for its high cost of living and elevated energy prices, the state of Washington now has the most expensive average gas price in the nation, according to data released June 20 by the American Automobile Association, better known as AAA.
A gallon of regular-grade gasoline in California now averages $4.86 as of June 22, with Washington coming in at $4.95 after jumping 33 cents over the past month, according to AAA.
While fuel prices in Washington have historically been higher than the national average, some experts are pointing to its newly imposed cap-and-invest carbon pricing program, designed to limit greenhouse gas emissions and similar to California’s cap-and-trade regulations—as the reason for the recent spike in prices.
According to the Oil Price Information Service, a petroleum price reporting agency for the Dow Jones company, the program could be adding as much as 50 cents per gallon to the cost at the pump for Washingtonians.
“While it sounds great, when you look at the numbers our gas didn’t get much cheaper, theirs just got more expensive,” Jason Murphy, foreman at a Northern California construction company, told The Epoch Times.
The national average currently sits at $3.58, a five-cent increase from last month but $1.43 cheaper than this time last year, and the Southeast region offers the best prices, with Mississippi recording the cheapest gas in the country at $3.01 per gallon, according to AAA.
Regional variability exists throughout California, with prices ranging from $4.17 to more than $9 per gallon depending on location. The small town of Mendocino on the Northern California coast routinely checks in with the highest prices in the nation, with one station currently advertising $9.29 per gallon regular and $9.33 for diesel.
Mid-grade gasoline averages $5.06 per gallon in the state, premium $5.22, with diesel coming in at $5.06, according to AAA.
Prices in Washington were higher than in California for nearly all grades of gasoline, with mid-grade averaging $5.14 per gallon and premium $5.34, but diesel registered slightly lower at $4.95, AAA reported.
Oil is currently trading at prices hovering around $70 per barrel, as of June 22, according to OilPrice.com—an oil and energy news and analytics firm.
The last time gasoline prices approached the levels seen today was in July 2008 when a barrel of oil peaked at over $145 and the national average price of regular-grade gasoline topped out at $3.25, according to the Energy Information Administration—a government agency tasked with compiling information related to energy policy.
Experts point to the disconnect between wholesale and retail prices, with today’s lower barrel prices not reflected in the price at the pump, as a combination of profit taking by oil companies and state taxes.
Every gallon of gas sold in California is subject to taxes and fees amounting to about an additional $1.18 per gallon.
Fuel prices impact Californians disproportionately, with those in the lower-income brackets being forced to dedicate a larger percentage of their take-home pay to cover the increases, according to experts.
“This is a direct hit at the middle class and the working poor,” Charles Langley, executive director of Public Watchdogs—a nonprofit based in California focused on the impact of regulatory agencies and energy policies—told The Epoch Times in a statement June 22. “Some of our elected leaders want to incentivize virtuous behavior through taxation in a state where it is nearly impossible to make a living wage, raise a family, and own a home unless you own a vehicle.”
Families throughout the state report less disposable income and more stress managing budgets, as commute costs have increased while wages have remained stagnant for many.
“Paying for gas is a huge burden on my family,” Sylvia Rodriguez, a Bay Area beautician, told The Epoch Times. “When the price went up so fast, we were shocked, and it meant we couldn’t afford to do things we enjoy, like eat out at restaurants.”
Surging fuel costs strained budgets in more ways than one, with the price of goods and services rising in tandem, as the price of gasoline has a significant impact on the cost of doing business—with logistical operations and construction machinery dependent on fuel and vulnerable to price volatility, according to economists.
“We were hoping the price would go back down, and it has a little, but not enough to allow us to live comfortably without worrying about having enough money for bills and groceries,” Rodriguez said. “And now everything that we need costs more. It makes it tough to provide for my children.”
Unpredictability and the variable nature of energy costs over the past three years add to the concern, as a lack of information makes it difficult to budget appropriately, both for families and businesses, experts suggest.
With the price skyrocketing from 2020 to 2022, some lawmakers called for Gov. Gavin Newsom to pause gas tax hikes to alleviate the burden on consumers, but the governor opted to proceed as planned, with such increases occurring in 2021 and 2022.
Pricing is also impacted by the state’s strict environmental laws, with winter and summer blends—the latter designed to limit smog and pollution but is costlier to produce—required by the strictest regulations in the nation.
Newsom responded to high gas prices last year by calling for winter blends to be allowed earlier than the usual October 31 start date.
Also in 2022, Newsom announced a windfall profit tax on gas companies, in what he said were punitive measures for oil companies raising prices at the pumps. Some economists argue that any tax placed on oil firms will eventually be borne by the consumer, as the cost will be passed on in the price of the oil sold.
Recognizing this concern, Assemblyman Al Muratsuchi (D-Torrance) assured his colleagues while debating the proposal March 27 that such was not the case.
“My biggest fear was that the penalty would just be passed on to consumers,” Muratsuchi said during the Assembly’s Utility and Energy Committee’s discussion prior to the floor debate on the bill. “But this bill is stronger than originally proposed … and is going to be in the best interest of consumers by having the transparency needed … to make sure oil companies are serving California’s interests and not the other way around.”
Though legislators from both sides of the aisle are skeptical about imposing the “penalty,” the measure passed the Legislature and Senate Bill X1-2 was signed into law in March, designed to allow an appointed commission—rather than the state Legislature—to limit and cap oil company profit margins.
Newsom applauded the approval and declared his intention to govern the industry at a press conference March 29 before signing the law.
“We proved that we could actually beat Big Oil,” Newsom told the crowd. “There’s a new sheriff in town in California, where we brought Big Oil to their knees.”
While currently Californians are no longer paying the most for gas, economists say the news will likely be short-lived, as the state has historically been the most expensive—topping the list in 95 percent of AAA’s surveys over the past decade.