L.A. Gas Price Hits $6

Average gasoline prices in Los Angeles hit $6 per gallon, GasBuddy’s head of petroleum analysis, Patrick De Haan, wrote in a tweet, noting this compared with an average of $4.756 per gallon a month earlier.

According to AAA data, the average for the state of California is $5.855 per gallon, which compares with less than $4 per gallon in a number of central and southern states.

“We’re all subject, more or less, to the same crude oil prices,” according to Hugh Daigle from the University of Texas at Austin’s department of petroleum and geosystems engineering, who spoke about prices with USA Today. “But a lot of the big drivers that cause (price) differences from state to state are distribution costs and state taxes.”

California has the highest excise duty on gas in the United States. It stands at $0.511 per gallon and is set to increase further from July this year as it tracks inflation.

There was an attempt to follow the example of other states that have temporarily suspended gas taxes to alleviate the pain for drivers, but the Republican proposal for a tax suspension was shot down by Democrats earlier this month. Meanwhile, Governor Gavin Newsom has proposed an alternative way of compensating drivers—direct rebate checks.

According to the Democratic proposal, drivers could be compensated with a one-time check for $400 as a way of dealing with rising prices at the pump, but it has yet to be approved. The finer points, however, have yet to be hammered out, addressing questions such as whether everyone, regardless of income status, will get the same amount of money.

Demand for fuels, meanwhile, remains strong, as noted earlier this month by GasBuddy’s De Haan.

“For now, gasoline demand has shown absolutely no signs of buckling under the pressure of higher prices, even as California nears an average of $6 per gallon, with spring break travel well underway,” he said this week.

By Charles Kennedy for Oilprice.com

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