Latest news with #MichaelMische
Yahoo
23-05-2025
- Business
- Yahoo
The State Where Gas Could Top $8 a Gallon Soon — and How To Save on Gas
From 2020 to 2022, inflation wreaked havoc on consumer prices. For some, the pain was most acute at the gas pump, where national prices rose by an astronomical 89.5%, according to the Pew Research Center. Although prices have abated a bit in 2025, one report, as reported by ABC 7 News, suggests that things could get much worse for the state that already has the highest gas prices in the nation — California. In fact, Michael Mische, a professor at the University of Southern California who wrote the report, believes that gas prices could rise to as much as $8 by 2026 in California, which currently has an average gas price of about $4.88, per AAA. Read Next: Check Out: Here are the reasons behind Mische's thesis, along with a look at what Californians can do to save on gas. While it remains to be seen whether gas prices in California will actually reach $8 per gallon, there are some solid economic principles behind Mische's prediction — specifically, the law of supply and demand. Several refineries in California, including ones in Benicia and Los Angeles, are slated to close. This will lower the supply of oil and gas, knocking the supply-demand equation out of whack. As any economics student can tell you, when the supply of a good or service that is in demand falls, its price rises. That's exactly what Mische sees happening in California. Not everyone agrees. California's governor, Gavin Newsom, is one of the most vocal critics of Mische, questioning both Mische's credibility and his predictive model, ABC reported. Learn More: State governments don't control gas prices, but the policies they enact can certainly influence them. To that end, Mische had some direct recommendations for California's governor and legislators, ABC reported. Those include rolling back the state excise tax, delaying any low-carbon fuel standard implementation and capitating cap-and-trade to a fixed amount. 'Those would all be beneficial to the California consumer,' Mische said. While individual consumers don't have much control over the direction of gas prices, there are some steps everyone can take to help minimize the pain. Use mobile apps to find cheap gas: A number of apps like GasBuddy can show the lowest gas prices available in a given area. Pump regular gas: Although gas stations are good at making midgrade and premium fuel sound attractive, and even necessary, the truth is that regular unleaded fuel is perfectly fine for the vast majority of cars on the road today. Always using regular gas can save you a significant amount of money. Take advantage of discounts: Some gas stations offer a discount if you use cash instead of a credit card. If you use a credit card, consider using one that gives you cash back or other bonuses for purchases at gas stations. Most major oil companies also offer their own credit cards that can provide discounts on the amount you pay at their stations. Plan your trips: Combining your daily trips into one and using a fuel-efficient method to reach all your stops is a good way to lower your gas costs. Cut down on your driving: Consider using public transportation or ride-sharing to avoid paying for gas. More From GOBankingRates These Cars May Seem Expensive, but They Rarely Need Repairs Sources Pew Research Center, 'Eggs, gasoline and car insurance: Where inflation has hit Americans hardest.' ABC 7 News, 'California gas prices could top $8 a gallon by 2026, new study says.' AAA, 'Fuel Prices.' This article originally appeared on The State Where Gas Could Top $8 a Gallon Soon — and How To Save on Gas
Yahoo
23-05-2025
- Business
- Yahoo
The State Where Gas Could Top $8 a Gallon Soon — and How To Save on Gas
From 2020 to 2022, inflation wreaked havoc on consumer prices. For some, the pain was most acute at the gas pump, where national prices rose by an astronomical 89.5%, according to the Pew Research Center. Although prices have abated a bit in 2025, one report, as reported by ABC 7 News, suggests that things could get much worse for the state that already has the highest gas prices in the nation — California. In fact, Michael Mische, a professor at the University of Southern California who wrote the report, believes that gas prices could rise to as much as $8 by 2026 in California, which currently has an average gas price of about $4.88, per AAA. Read Next: Check Out: Here are the reasons behind Mische's thesis, along with a look at what Californians can do to save on gas. While it remains to be seen whether gas prices in California will actually reach $8 per gallon, there are some solid economic principles behind Mische's prediction — specifically, the law of supply and demand. Several refineries in California, including ones in Benicia and Los Angeles, are slated to close. This will lower the supply of oil and gas, knocking the supply-demand equation out of whack. As any economics student can tell you, when the supply of a good or service that is in demand falls, its price rises. That's exactly what Mische sees happening in California. Not everyone agrees. California's governor, Gavin Newsom, is one of the most vocal critics of Mische, questioning both Mische's credibility and his predictive model, ABC reported. Learn More: State governments don't control gas prices, but the policies they enact can certainly influence them. To that end, Mische had some direct recommendations for California's governor and legislators, ABC reported. Those include rolling back the state excise tax, delaying any low-carbon fuel standard implementation and capitating cap-and-trade to a fixed amount. 'Those would all be beneficial to the California consumer,' Mische said. While individual consumers don't have much control over the direction of gas prices, there are some steps everyone can take to help minimize the pain. Use mobile apps to find cheap gas: A number of apps like GasBuddy can show the lowest gas prices available in a given area. Pump regular gas: Although gas stations are good at making midgrade and premium fuel sound attractive, and even necessary, the truth is that regular unleaded fuel is perfectly fine for the vast majority of cars on the road today. Always using regular gas can save you a significant amount of money. Take advantage of discounts: Some gas stations offer a discount if you use cash instead of a credit card. If you use a credit card, consider using one that gives you cash back or other bonuses for purchases at gas stations. Most major oil companies also offer their own credit cards that can provide discounts on the amount you pay at their stations. Plan your trips: Combining your daily trips into one and using a fuel-efficient method to reach all your stops is a good way to lower your gas costs. Cut down on your driving: Consider using public transportation or ride-sharing to avoid paying for gas. More From GOBankingRates 4 Affordable Car Brands You Won't Regret Buying in 2025 Sources Pew Research Center, 'Eggs, gasoline and car insurance: Where inflation has hit Americans hardest.' ABC 7 News, 'California gas prices could top $8 a gallon by 2026, new study says.' AAA, 'Fuel Prices.' This article originally appeared on The State Where Gas Could Top $8 a Gallon Soon — and How To Save on Gas
Yahoo
11-05-2025
- Business
- Yahoo
New report warns California gas prices may soar past $8 a gallon by 2026
SAN DIEGO (FOX 5/KUSI) — A new report warns gas prices locally and across California may rise up to 75% by 2026 as refinery capacity shrinks. The average price for a gallon of regular gas in San Diego County rose Saturday to $4.79, nearly two dollars more than the state average of $3.13, but in the months to come all drivers in California could all be paying much more to fill up. With warmer months ahead, we can expect something besides just temperatures to go up. 'Historically, we always pay a little bit more for gas during the summer because of that high demand and because of that summer blend gasoline,' said Annlleyn Venegas, Senior Public Specialist with the American Automobile Association. Venegas said price shifts are also often influenced anytime there are fears about supply. The report by Michael Mische at USC's Marshall School of Business warns fuel prices could top $8 by the end of next year. San Diego-area drivers are dreading what might be coming at the pump. Gas prices could top $8 in California by 2026 due to refinery closures, report warns 'I'm probably going to drive a lot less if I'm having to pay that much for gas. It's concerning. We already pay more than every other state,' said resident Austin McAdams. 'It would be less travel. I would have to make different plans and things like that. So, it would definitely be more of a hardship,' said resident Leslie Brown. The report cites the scheduled closures of the Phillips 66 Refinery in Los Angeles this October and Valero's Benicia Refinery next April. It states when that happens, it could mean a potential 21% reduction in the state's refining capacity over three years, and some lawmakers are waving the red flag. 'We are in a current financial crisis and we're on the precipice of a financial disaster if the governor doesn't get his arms wrapped around this problem and get it fixed,' said State Senate Minority Leader Brian Jones, R-San Diego. Jones sent a letter to Governor Gavin Newsom urging him to 'find immediate solutions and prevent further closures.' Newsom's office pushes back on report claiming 75% spike in California gas prices by 2026 Governor Newsom has disputed the study's findings. Taking to X, his press office shared a letter he sent to the California Energy Commission directing it to 'redouble efforts to work with refiners to ensure a safe, affordable and reliable supply of gasoline.' As they keep tabs, some experts are waiting for clarity with the rest of us. 'It's really hard to know for sure what could happen in the near future,' said Venegas. The study also suggested ways lawmakers can lower gas prices, such as revoking a plan to ban the sale of new gas-powered cars by 2035, and easing restrictions on in-state petroleum production. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
CBS News
09-05-2025
- Business
- CBS News
California gas prices could reach $8 by end of 2026, report says
SACRAMENTO — Gas prices in California could reach more than $8 per gallon by the end of 2026, marking a potential 75% increase over current rates, according to a new report. The study, led by Michael A. Mische of USC's Marshall School of Business, projects that regular gasoline could cost between $7.35 and $8.43 per gallon — up from the statewide average of $4.82 as of April 23, 2025. While the exact price point depends on market variables, Mische says there is a clear trend: "The models all indicate the same thing — the price of gas is going up." A major contributor to the projected price spike is the scheduled closure of two key oil refineries: Phillips 66 in Los Angeles and Valero in Benicia. According to the report, these closures would reduce California's refining capacity by 21% over the next three years, potentially removing 6.6 million to 13.1 million gallons of gasoline per day from the state's fuel supply. California currently consumes over 13.1 million gallons of gasoline daily, while producing less than 24% of its crude oil needs. "We're not going to see a 20% drop in demand to match that reduction," Mische said. "That creates a significant supply shortfall." California is also losing about 20% of its refinery production, a reduction Mische says is equivalent to over half the total production capacity of the state of Washington. "We're not going to see a 20% drop in demand to match that reduction," he said. Mische highlighted points from the study in an interview with CBS13 that create a mix of factors driving up prices: Increasing state excise and sales tax, expanding cap-and-trade program costs, a pending change to the Low Carbon Fuel Standard, declining in-state oil production and refinery capacity, the state's lack of incoming fuel pipelines, and increasing reliance on costly maritime transport. The logistics challenges extend to global instability. "Any disruption to maritime transport—geopolitical events, a hurricane in the Gulf, labor disputes—could cause major problems," Mische said. "We're putting ourselves in a vulnerable position." The LCFS alone, if passed in its current form, could raise prices by nearly 10%, according to estimates Mische cited — though he noted that the California Air Resources Board has since removed specific price projections from its website. Other hidden costs include transportation, since gasoline may now need to be shipped in from the Gulf Coast or Asia, as well as storage reserves. "Refiners are required to hold 14 to 16 days' worth of gasoline on reserve," said Mische, "and the cost of maintaining that reserve will be passed on to consumers." Mische noted that the data used in the study were provided by the State of California through publicly available data, as well as data from the Federal Government, which was also publicly available. Mische emphasized that the study isn't a doomsday prediction—it's a risk assessment. "We layered in a wide array of variables—from refinery capacity and seasonal blends to global spot prices and consumer demand elasticity," he said. "It's not about whether the price hits exactly $8. It's about understanding the trajectory and being prepared." Stockton gas station raises prices Ernie Giannecchini has owned and operated Ernie's General Store and Deli in Stockton for forty years. Typically, he's the cheapest gas in town with his cash price coming in under $4, at times. He told CBS13 this is his way of turning the tables on big oil companies and saving some pain at the pump for his customers. Over the holidays, he's dropped the cash price for a gallon and customers have responded by showing up and showing out, supporting the small business. A week ago, Giannecchini said the price was $3.99, but on Thursday, he was forced to go up to $4.49. It's still below the state average per gallon, but it's not the lowest for his customers, something he says he wishes he could change. "My prices have to go up because I'm at rock bottom prices, I'm just basically at my cost right now, and I usually try to be the lowest price in the area, in Stockton... I have a lot of loyal customers," Giannecchini said. He told CBS13 he hopes that the price can go back closer to what it usually is for customers, the lowest in town. But as of now, he explained, there's "no end in sight" for the price going up. Governor's office responds In a statement to CBS13, a spokesperson for the Governor, Daniel Villasenor, noted that in March, Gov. Gavin Newsom directed the state to redouble efforts to work with refiners to ensure a safe, affordable, and reliable supply of gasoline. The statement read: "In the two years since the Governor signed California's gas price gouging law, the state has avoided severe gasoline price spikes like the historic 2022 spike, saving Californians billions of dollars at the pump. The law established the nation's first state-level independent petroleum watchdog to hold Big Oil accountable, and the state has more transparency from the industry than ever before. Governor Newsom will keep fighting to protect Californians from price spikes at the pump." California Republicans demand action In a statement, Senate Minority Leader Brian W. Jones (R-San Diego) warned of a looming "energy and economic crisis", citing the same study by Mische. In a letter to Governor Gavin Newsom, Jones urged immediate action to halt the shutdowns, calling them a threat not only to fuel prices, but also to thousands of good-paying jobs and California's energy security. He blames state policies and excessive regulations for pushing refineries out of operation. "We're not just losing gas. We're losing jobs, losing local economies, losing our grip on affordable living in California, and losing a critical layer of our national security," Jones said.
Forbes
08-05-2025
- Business
- Forbes
Why California Drivers Could Soon Pay $8 A Gallon For Gas
On the heels of my recent article outlining how California's unique fuel regulations — not corporate price gouging — are driving up gasoline prices in the state, new developments have added urgency to that conversation. On May 6, California Senate Minority Leader Brian W. Jones (R-San Diego) sent a letter to Governor Gavin Newsom sounding the alarm over what could become an energy and economic crisis in the state. Citing an analysis by University of Southern California professor Michael Mische, the letter warns that gas prices could spike 75% by 2026 — reaching as high as $8.43 per gallon — if two major refineries are allowed to shut down as planned. This follows Professor Mische's earlier study, which I referenced in my prior article. His research identified structural factors and policy-driven costs as the primary reasons California gasoline prices are consistently the highest in the nation — not oil company profiteering. These factors include high state taxes, a boutique fuel blend required only in California, and an increasingly constrained refinery landscape. Two key in-state refineries are scheduled to close in the coming months: the Phillips 66 refinery in Los Angeles by the end of 2025, and the Valero refinery in Benicia by April 2026. Together, these facilities produce approximately 20% of California's gasoline supply. Professor Mische's projections are stark. He estimates that gas prices could reach $6.43 per gallon after the first closure and climb to $8.43 by the end of 2026 after the second. These numbers assume stable crude oil prices. But if global oil markets turn volatile — as they often do — the ceiling could be even higher. Refining gasoline in California has become increasingly difficult. The state's stringent environmental rules, such as the Low Carbon Fuel Standard (LCFS), coupled with recent legislation like SBX1-2 and ABX2-1, have layered on costly compliance burdens. Add in uncertainty around future bans on internal combustion vehicles and a hostile investment environment, and it's not hard to see why refinery operators are opting to exit the state. The problem isn't limited to fuel prices. According to Senator Jones' letter, the closures would also eliminate around 1,300 direct jobs and nearly 3,000 more indirectly. These are good-paying, union and trade jobs in communities that can ill afford the loss. Beyond economics, the closures also increase the state's reliance on imported fuel — most of which must be transported by ship — raising logistical risks and, arguably, national security concerns. The letter from Senator Jones reads as both a policy critique and a plea for realism. It challenges Governor Newsom to reconsider regulations that are squeezing fuel producers out of the state and proposes collaboration with the energy industry to explore solutions. Those could include tax incentives to maintain refining capacity, or temporary relief from some of the more onerous rules that disproportionately affect California refiners. It's important to understand that California's fuel market is largely isolated. The state's environmental regulations and fuel specifications make it difficult to import gasoline from other states or countries. When refineries close, there aren't many viable alternatives. And when supply tightens in a market with limited flexibility, prices surge — sometimes dramatically. Much of the public and political dialogue around gas prices in California has focused on oil company profits and alleged price gouging. But the data simply doesn't support that narrative. Multiple independent investigations — including those by the FTC and the California Energy Commission — have found no clear evidence that refiners are colluding or manipulating the market. The price premiums in California are mostly structural, driven by policy choices. Those choices may reflect environmental priorities, but they also carry economic consequences. Policymakers must grapple with this trade-off, especially as the state's energy mix continues to evolve. If California continues down a path that discourages in-state refining while failing to address the growing supply gap, residents should brace for more sticker shock at the pump. Gasoline prices of $8 or more per gallon are no longer hypothetical; they are within view if the state doesn't take action. To be clear, this is not an argument against clean energy. California can pursue its climate goals and still maintain a stable, affordable energy supply. But doing so will require pragmatic policies that ensure reliability and economic viability — not just ambition. As I wrote in my previous article, this isn't about corporate greed. It's about structural and regulatory decisions that have real-world consequences for working families, small businesses, and anyone who drives a car in California. The choice isn't between climate progress and affordable fuel. The choice is whether we make that transition responsibly — or let the market punish those who can least afford it.
