Why Is Fuel In California So Expensive?

by Tom Moore on Nov 1, 2022 9:05:00 AM

Why is diesel so expensive in California? $6.08 in CA vs. $4.84 in the rest of the US. California has additional costs:

Prepaid sales tax of 0.47/gal (but this will be dropping to $0.33/gal effective next month
0.46/gal cap and trade cost
A refinery “monopoly” that generates a $101/barrel profit vs. a Gulf Coast refinery having a $6/barrel profit:
- Only California refineries can make “clean enough” fuel —so imports from other states are a no-no
- Refining capacity has declined 12% since 2017 and will go down a further 8% next year.

These are serious additional costs.

On-highway diesel prices in California comparing other parts of the US

Future delivery prices are an indication of the direction the market may go. They specifically exclude all taxes.

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