Supply issues, compliance costs drive up California fuel prices, EIA says
May 5 (Reuters) - Drivers in California pay higher prices at the pump than any other state in the country due to supply issues, costs from environmental compliance and fuel requirements, and high state taxes and fees, the U.S. Energy Information Administration said on Monday.
In March, costs from Californian environmental programs such as Cap-and-Trade and the Low Carbon Fuel Standard added as much as $0.54 per gallon, the latest data showed.
The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here.
Consumers in California also pay around $0.90 per gallon in taxes and fees as of March, the highest in the country, the EIA said.
WHY IT'S IMPORTANT
California is the largest U.S. gasoline market but several fuelmakers have ceased operations at less profitable facilities, citing regulatory challenges and market dynamics.
Six plants have shut since 2008, two of which have converted to producing renewable fuels.
The state will likely see even higher gasoline prices as refinery closures put pressure on fuel supply and force the state to rely more on imports from countries like India and South Korea.
Retail prices for regular grade gasoline in the state often exceed the national average by more than a dollar per gallon, the EIA said.
CONTEXT
In October, California Governor Gavin Newsom signed into effect ABX2-1, a bill designed to prevent fuel supply shortages in the state that gives regulators more control over inventory levels for refiners.
Shortly after, Phillips 66 (PSX.N), opens new tab announced plans to shut its large Los Angeles-area oil refinery in the fourth quarter of 2025.
Last month, Valero Energy (VLO.N), opens new tab announced plans to cease operations at its San Francisco-area oil refinery next year.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
4 hours ago
- Reuters
UK's Metro Bank receives takeover approach, Sky News reports
June 14 (Reuters) - UK's Metro Bank (MTRO.L), opens new tab has been approached about a takeover bid backed by a private equity firm Pollen Street Capital, Sky News reported on Saturday. Reuters could not immediately confirm the report.
Reuters
5 hours ago
- Reuters
Iraq reopens Syria crossing for trade and passenger traffic
ANBAR, June 14 (Reuters) - Iraq has officially reopened the Qaim border crossing with Syria for trade and passenger traffic, a spokesman for the Iraqi border authority said on Saturday, marking a key step in efforts to normalise relations and revive economic ties between the two countries. 'The Qaim crossing is now fully operational for both cargo trucks and civilian movement,' the spokesman told Reuters, adding that the reopening followed joint security assessments by Iraqi and Syrian officials. The move comes three months after Syrian Foreign Minister Asaad al-Shibani visited Baghdad and urged Iraq to resume cross-border trade. The crossing had been shut in the wake of the revolt that toppled President Bashar al-Assad and the ensuing years of conflict that destabilised the region. The reopening is also seen as a sign of warming ties between Baghdad and Syria's new leadership under President Ahmed al-Sharaa, who has sought to re-establish diplomatic and economic relations with regional neighbours. Iraqi officials say the two governments have intensified coordination on border security and trade facilitation since al-Sharaa took office last year. 'This crossing will serve as a strategic corridor for commodity trade between Iraq and Syria,' said Turki al-Mahallawi, mayor of the town of al-Qaim, where the border post is located.
Daily Mail
9 hours ago
- Daily Mail
Ford forced to shutter factories amid worrying parts shortages: 'Hand-to-mouth right now'
China's trade leverage temporarily shuttered one of Detroit's biggest brands. Ford's CEO, Jim Farley, said his company doesn't have enough rare-earth magnets, forcing the automaker to halt some production lines. 'It's day to day,' the top boss said in a Friday interview with Bloomberg News. 'We have had to shut down factories. It's hand-to-mouth right now.' Ford's production struggles are part of the ongoing tit-for-tat trade escalation between Washington and Beijing. But the company is expecting relief in the coming weeks. In April, Chinese officials stopped the flow of magnets into the US — a critical component found in nearly every modern car's brake pads, seats, windshield wipers, and batteries. The pause came in response to President Donald Trump's then-145 percent tariffs on all Chinese imports. The throttled magnet trade threatened to strangle production plants and empty car dealership lots, sending automakers and industry groups into a tizzy. In May, the Alliance for Automotive Innovation — which represents major US automakers — sent a letter to President Trump warning that China's response could paralyze car production. 'Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components,' the letter, signed by the group's president, John Bozzella, said. 'In severe cases, this could include the need for reduced production volumes or even a shutdown of vehicle assembly lines.' Later that month, workers at Ford's Chicago plant, where the company builds the popular Explorer SUV, were told to go home due to the magnet shortage. But as Ford continues to scramble for parts, the company is now expecting a reopening of the supply spigot. American and Chinese trade negotiators have announced a tentative agreement that lowers tariff rates and resumes magnet exports. The deal includes temporary export licenses for rare-earth suppliers. Those licenses will allow magnet shipments to resume to the top three US automakers — including Ford — as soon as this month. China's President Xi Jinping has not officially signed the deal, but President Trump posted on Truth Social that the agreement was 'done.' Industry analysts confirmed to that rare-earth magnets will likely be exempt from American tariffs under the new deal. A standard gas-powered vehicle requires around a half-pound of rare earth magnets CEO Jim Farley confirmed that Ford had temporarily shuttered some of its plants because of China's magnet pause Ford produces over 80 percent of its SUVs and trucks for the US market in American plants Still, as the pipeline starts back up, Farley's announcement underscores China's current leverage over American manufacturing. The US once refined its own rare-earth magnets for vehicle assembly, with facilities operating across dozens of Midwestern states. But 20 years ago, the last domestic refinement plant — located in Indiana — shut down. China, which now controls more than 90 percent of global rare-earth processing capacity, filled the gap. American automakers are now looking elsewhere for supply, including Australia, Canada, and Saudi Arabia. 'Should the US-China trade deal be upheld by both sides, US automakers should be able to secure enough rare earths to continue their production as scheduled,' Seth Goldstein, a vehicle analyst at Morningstar, told 'I would guess all US automakers are looking to secure alternate rare earths supply outside of China as a way to protect themselves from the potential that China may halt exports again in the future.'
