Given the skyrocketing cost of petrol in California, legislative representatives have announced a detailed strategy to solve the problem.(Photo : by Justin Sullivan/Getty Images)
California officials have unveiled a plan to address high gasoline prices, aiming to stabilize the market and ease consumer burdens, marking a significant step towards mitigating rising gas costs.
The average gas price in California rose to $5.27 per gallon last month, largely due to refinery issues and higher production costs for the state's unique fuel mix standards, along with high taxes aimed at reducing carbon emissions.
With the summer driving season approaching, gasoline demand is expected to increase, but if prices become too high, demand may decrease as people reconsider non-essential travel.
Given the skyrocketing cost of petrol in California, legislative representatives have announced a detailed strategy to solve the problem. The suggested remedy seeks to maintain gasoline market stability while easing consumer burdens. Despite the plan's mixed reception, it's a big step in the right direction to lessen the state's exposure to rising gas costs.
California's High Gasoline Prices: State Officials Propose a Solution
High gasoline prices in California have prompted state officials to unveil a plan to address the issue. The proposed solution aims to alleviate the burden on consumers and ensure market stability. This move marks a significant step towards mitigating the impact of high gasoline prices in the state.
According to AAA statistics, the average gas price in the Golden State increased by $0.23 to $5.27 per gallon on last month. The national average was $3.54 a gallon, an increase of $0.04 over the same time frame.
The primary cause of California's skyrocketing prices, according to Tom Kloza, global head of energy research at OPIS, is refinery issues. One significant refiner in the Bay Area, Phillips 66, stopped producing gasoline in favor of renewable diesel.
According to Kloza, the price of gasoline in San Francisco is around $60 per barrel more than the current crude prices, after deducting taxes and other expenses.
In an effort to limit refinery profits, California approved the Gas Price Gouging and Transparency Law last year. Next week, regulators will get together to finalize the specifics of particular regulations.
Due to the state's unique mix standards, which are more expensive to create than those in other states, California gasoline has historically been more expensive than that of other states. High taxes and levies are also levied in California in connection with efforts to lower carbon emissions.
Regina Mayor, KPMG's global head of clients and markets, noted that with the summer driving season approaching, gasoline demand is expected to increase, driving prices up in the short term. However, if prices become too high, demand is likely to decrease. While people need to drive for daily activities such as commuting to work and transporting their children, they may reconsider driving for summer holidays if gas prices become too steep.
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