Mr. Milder said the recent price spike is attributable to an increase in global crude oil prices, refinery maintenance, not enough inventory and imports, and a single “unusual” purchase on the state’s oil market that raised prices across the board.
Planned and unplanned maintenance at refineries in the state also contributed to the price spikes.
“Such events decrease production capacity and lower supply availability,” Mr. Milder said.
Based on the agency’s review of recent data, refiners also did not appear to maintain adequate levels of inventory of refined gasoline or the state’s special “summer blend” gas, which is more eco-friendly but costs more.
“When demand is high in the summer, undersupply can quickly lead to soaring prices at the pump,” he added.
The state also adds the highest taxes and fees in the nation—$1.31 a gallon—to each gallon. That includes state and federal excises taxes, cap-and-trade and other environmental fees, and state and local sales taxes, according to the latest weekly update on Sept. 7 by the Western States Petroleum Association (WSPA), the oldest petroleum trade association in the United States.
The one unusual transaction on the state’s oil market on Sept. 15 elevated the price of oil for several days, Mr. Milder said.
“It is not an exaggeration to say that one trade likely cost California drivers many millions of dollars at the pump,” Mr. Milder added.
Oil industry experts reacted to the update Monday.
Tim Stewart, president of U.S. Oil and Gas Association, said the report reached the same conclusions that the industry reported during price hikes last year.
“Unfortunately, we see this all too often in our industry with politicians who are unwilling to admit their regulations are increasing costs to consumers,” Mr. Stewart told The Epoch Times. “Instead of tackling the tough issues they helped create, they tell the bureaucracy to ‘get to the bottom of things.’”
“The bureaucrats then do their work, and sure enough, they usually reach the same conclusions that industry has been telling the politicians all along,” he added.
Kara Green, spokeswoman for WSPA, said the industry was “taking more of a wait-and-see approach to see what the actual effects will be of the recent legislation.”
“It looks like the administration, or at least the [California Energy Commission], acknowledges there’s a lot of factors that influence cost at the pump for California consumers,” Ms. Green told The Epoch Times. “Another takeaway that I read from [the update] is the [Energy Commission] acknowledging that policies in California can make things more expensive.”
Gas prices in the Golden State increased to an average of $5.89 Wednesday for a gallon of regular-blend gasoline—nearly $2.06 more than the national average, according to the Automobile Club of Southern California (AAA). The national average was about $3.83 per gallon.
In Los Angeles, the average price reached over $6.16, which was more than two cents higher than the day before and more than $.20 higher than last year.
Orange County drivers were paying about $6.13 a gallon for regular gasoline, which was nearly $.20 higher than a year ago.
California’s supply of gasoline dropped dramatically last year as some refineries were closed for maintenance, adding to the price spike. The state’s gas production in 2022 was reduced by 88,000 barrels per day—equal to the output of a midsized refinery—compared to the previous year, according to fuels expert David Hackett of Stillwater Associates in Irvine.
In response to Mr. Milder’s update, the governor applauded the new agency’s insight into the oil market.
California Energy Commission Vice Chair Siva Gunda also said the new tools will add critical information to the state’s understanding of the petroleum market.
The bill, which sailed through the state Legislature in less than a week, created the Petroleum Market Oversight division and requires oil companies to report daily operations, shipping information, contracts, agreements, forecasts, and other sometimes-confidential market data, including how much they pay for each gallon of crude.
“Refinery production and imports have improved the Southern California fuel supply situation, causing wholesale prices to drop for the last few days,” said Auto Club spokesperson Doug Shupe on Sept. 21. “According to Oil Price Information Service (OPIS), the PBF Energy refinery in Torrance and the Wilmington portion of the Phillips 66 refinery have both started multi-week planned maintenance projects this week.”
OPIS analysts reported large shipments of imported gasoline were expected to arrive soon on the West Coast, which would likely offset the upward pressure on pump prices caused by refinery maintenance, Mr. Shupe added.
