Cleaner gas makes for higher prices
Like anything good — such as steak, cars and whiskey — cleaner gas comes with a price.
California boasts some of the highest gas prices in the nation, leaving many drivers feeling as though they carry a heavy burden unfairly levied on them by oil companies.
According to UC Berkeley economist Severin Borenstein, factors other than exploitation are to blame.
Californians pay on average 60 cents more than the national average for gas, which is $3.68. California’s gas prices range near $4.30.
Borenstein of the Haas School of Business told CBS San Francisco it’s because California is shorthanded when it comes to gas production.
This gets problematic because the state has such a high standard for gas due to air pollution concerns:
“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. That doesn’t mean that they’re intentionally shutting down refineries or causing problems, but it does change their incentives a bit.”
California’s gasoline has been reformulated several times over the last two decades to reduce harmful emissions like sulfur and benzene. Refiners contend these formulations are more expensive to produce.
Makes sense when you think about it. But that doesn’t change the fact that it’s a pain in drivers’ wallets.