Cleaner Gasoline Means Higher Prices in California
BERKELEY (CBS SF) – Californians routinely pay some of the highest gas prices in the nation, and the current cost of a gallon at the pump is no exception. But, drivers who think they’re being unfairly exploited by the oil companies should think again – says one UC Berkeley economist, who points to many other reasons why the cost of fuel is so high.
We pay, on average, 60-cents more per gallon than the national average.
The average price for a gallon of gas, nationwide, hovered around $3.68, whereas it’s roughly $4.30 a gallon in California.
“I am a big conspiracy theorist myself,” said a driver who identified himself only as Scott. “There doesn’t seem to be any oversight whatsoever on the gas or the gas prices.”
He theorized that refineries deliberately shut down refineries to drive up prices.
Not so, says Haas School of Business economist Severin Borenstein.
“I think there is some concern about the west coast gasoline market, the rest of the U.S. is actually quite competitive but we have fewer refineries in the west coast and the ownership of them is more concentrated,” he explained.
“That doesn’t mean that they’re intentionally shutting down refineries or causing problems,” he continued, “but it does change their incentives a bit.”
California gas, he explained, costs more to make – because it needs to be formulated to meet the state’s high standards regarding reduction in air pollution.
KCBS’ Bob Butler Reports:
(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)