revealed<\/a> a variety of factors are causing high prices, including global supply difficulties, refinery closures, and state policies. It found that the state\u2019s high fuel prices are caused by a number of laws imposed by Democrats to protect the environment \u2014 not gouging by the oil companies themselves.<\/p>\nNotably, California requires fuel stations sell a special gas blend intended to reduce emissions, which is more expensive to produce. The blend also means the state is an \u201cenergy island\u201d that can\u2019t simply import cheaper fuel from other states. The special blend adds about 10 to 15 cents per gallon of gas.<\/span><\/p>\nOther factors include a 61-cent state excise tax per gallon; 23 cents per gallon from the state\u2019s cap-and-invest program, which was created to reduce greenhouse gas emissions; and 14 cents per gallon from the state\u2019s Low Carbon Fuel Standard.<\/span><\/p>\nNot on the list of oil refinery price gouging, which California Democrats have blamed for skyrocketing prices for years. In 2024, the California state legislature convened a special session during which it capped oil company profits. Two years later \u2014 and after the closure of two refineries that supplied almost 20% of California\u2019s refining capabilities \u2014 state officials finally admitted there was no evidence of price gouging.<\/p>\n
Now, California is outsourcing some of its oil refining to Asian countries, CBS News California Investigates reported. Relying on those countries can increase gas prices, since oil must be shipped across the Pacific, sometimes taking weeks to reach the state. Delays in transit can spike prices in the event of global shortages or refinery outages.<\/span><\/p>\nEven though global conflicts are exacerbating prices, the outlet found California\u2019s gas prices were already higher than the national average, with 55% of the cost of each gallon coming from state-specific costs.<\/span><\/p>\nAnother factor is a \u201cmystery surcharge\u201d that appeared in 2015 after the closure of a major refinery, but refinery operating costs were already higher in California before that surcharge, UC Berkeley economist Severin Borenstein told CBS News California Investigates.<\/span><\/p>\nAfter the state legislature found no evidence of price gouging, state officials said they found some causes of price increases.<\/span><\/p>\n\u201cWe\u2019ve identified certain dynamics that were creating those price spikes,\u201d California\u2019s National Resources Secretary Wade Crowfoot told CBS News California Investigates.<\/span><\/p>\nCrowfoot said the state is trying to balance both affordability and climate goals, according to the outlet. He said he was not \u201cin a position to point a finger\u201d when asked if there was evidence of price gouging.<\/span><\/p>\nLast year, the California energy commission voted to pause its ability to set price caps on oil company profits for the next five years.<\/span><\/p>\nManager of the Chevron Richmond refinery Tolly Graves told CBS News California Investigates that price caps ignore the volatility of the industry.<\/span><\/p>\n\u201cThose good months are the only way we make a profit \u2026 if you cap the good months but don\u2019t support the bad ones, it creates an unviable business,\u201d Graves said.<\/span><\/p>\nThe Chevron refinery produces gas for 20% of cars in Northern California and 60% of jet fuel from Sacramento to San Jose, according to the outlet.<\/span><\/p>\nHigher labor, energy, and regulatory costs all contribute to higher gas prices, Graves told the outlet. The state\u2019s gasoline blend also requires specialized production that cost billions of dollars in investment.<\/span><\/p>\n\u201cIt costs us hundreds of millions a year just to stay in business,\u201d Graves said. \u201cThings have to change for us to be willing to invest in a refinery in California.\u201d<\/span><\/p>\nCalifornia Governor Gavin Newsom\u2019s office did not respond to The Daily Wire\u2019s request for comment.<\/span><\/p>\n<\/div>\n
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