Santa Rosa’s average price for a gallon of regular gas has inched down to $4.436 after skyrocketing within a few days to a record $4.65 two weeks ago. Why our are gas prices so crazy?

There’s an excellent story in the Los Angeles Times by Ken Bensinger that explains it all. And he writes that Californians can expect more wild price spikes.

Basically, California is an island when it comes to gas production. The state’s air pollution regulations require a special gas used nowhere else in the U.S., and most of that gas is made in California. So there’s no real competition from refineries in other states, where the gas might be able to be made cheaper.

When prices jumped early this month, Bensinger writes, “the state’s oil refiners were raking it in. For the week that ended Oct. 8, when the average price for a gallon of gasoline in California hit a record high of $4.67, the portion of the retail price going to refiners, or margin, jumped to $1.22 a gallon. That was up 75 percent from the previous week. And it was nearly triple the average margin of 42 cents a gallon this year, according to California Energy Commission data.”

As is usual, prices haven’t dropped as fast as they climbed. Santa Rosa’s latest average price, as reported Monday by AAA,  was down about 2 cents a gallon from Sunday’s report. But a month ago, before the spike, the average was “only” $4.16.

It seems like someone is getting ripped off. Federal and state authorities investigated past price spikes but never determined anything illegal.

As to where gas prices are going, Patrick DeHaan, a senior petroleum analyst for, said he expects they’ll “continue to decline, with the statewide average close to $4.05 by Thanksgiving. Prices haven’t fallen faster as stations enjoy improved margins — there is apparently a lack of vigorous competition at the moment. Having said that prices will decline, albeit at a slow rate.”

To read the full Los Angeles Times story, CLICK HERE.


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