A regular gallon of gasoline costs more than $6 on average in parts of the Los Angeles area, while prices hit $7 in parts of California on Tuesday as dwindling oil supplies put pressure on motorists Americans.
It was the first time since October of last year that gas in Los Angeles and Orange counties exceeded the $6 threshold, according to Fox 11 Los Angeles TV.
The national average for a gallon of gasoline was $3.88, an increase of about eight cents in the span of a week, according to the American Automobile Association.
This time last year, a gallon of gasoline was 18 cents cheaper nationally, AAA said.
No relief appears to be on the horizon, at least not in the short term.
Chevron CEO Mike Wirth predicted oil prices would reach “close to” $100 a barrel.
“Supply is tightening, inventories are dwindling… the trends suggest we are certainly on the right track, we are getting closer (to $100 a barrel),” said Wirth, who runs the second-largest producer energy company, on Bloomberg TV on Monday.
Rising gasoline prices have fueled higher inflation rates, forcing consumers to pay more for fuel while limiting discretionary spending.
As of Tuesday, the average price of a gallon of regular gasoline cost motorists in Los Angeles County, the nation’s most populous, $6.03.
A gallon of gas would cost drivers in neighboring Orange County $6.02, according to the latest AAA data.
The state’s most expensive gasoline is found in Alpine County, the region about 120 miles east of Sacramento that straddles the Nevada border.
The average price for a gallon of regular fuel in Alpine County costs $6.99, according to AAA.
California traditionally faces some of the highest average gas prices in the country, primarily due to the state’s high tax rate as well as its clean energy regulations.
The Golden State charges drivers both an excise tax on a gallon of gasoline and a sales tax, according to the California Department of Taxes and Fees Administration.
Tax revenues are used by the state to repair and maintain roads and transit systems.
In October 2022, gas prices in Los Angeles reached an all-time high of $6.49, prompting Governor Gavin Newsom’s administration to hand out gas rebates to Californians ranging from $200 to $1,050 according to income level.
The most important factor that determines gas prices in California and the rest of the country is the price of oil.
Oil prices hit $95 a barrel for the first time this year on Tuesday – a trend fueled by supply cuts from Saudi and Russian oil producers.
Brent crude, the international benchmark, was trading at around $95.33 per barrel on Tuesday morning.
The American benchmark, West Texas Intermediate, was valued at $91.48 per barrel.
On June 27, WTI stood at $67.70 per barrel.
“Oil prices are putting upward pressure on pump prices, but that rise is mitigated by much weaker demand,” said Andrew Gross, a spokesman for AAA.
“The drop in the number of people refueling is typical, with schools resuming classes, days getting shorter and the weather less pleasant,” Gross added.
“But the usual decline in pump prices is currently hampered by high oil costs.”
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