California’s energy reality: fewer refineries, more imported oil, and some of the highest fuel taxes in America are driving the cost at the pump.
Every time tensions rise in the Middle East, many Californians assume that global conflict is the main reason gasoline prices spike at home. While world events can influence oil markets, the reality is that California’s gasoline prices are driven far more by the state’s own energy structure and policies than by events overseas.
California once had one of the largest refining systems in the United States. In the early 1980s, the state had roughly 40 to 50 operating refineries. Today, only about 13 remain. Throughout the same period, refining capacity has dropped from roughly 2.4 million barrels per day to about 1.7 million. Several refineries have shut down or converted to other fuels in recent years, tightening the state’s fuel supply.