For much of 2016, Sacramento-area motorists and those throughout California enjoyed lower-than-usual gasoline prices due to a fortunate sequence of events. Now, several developments are combining to push prices upward.
The average retail price of gasoline in the Sacramento rose 16.4 cents a gallon in a week’s time, according to Monday’s report by national tracker GasBuddy.com. The primary driver of that was a 12-cent increase in the base gasoline excise tax that went into effect statewide last Wednesday. Diesel taxes increased 20 cents a gallon the same day.
GasBuddy’s weekly report showed the area average at $3.05 a gallon, more than 50 cents higher than the national average of $2.53.
The Sacramento-area price is 44 cents higher than it was one year ago. However, at-the-pump costs have been higher on the same day in years past – $3.13 in 2014, $3.53 in 2013 and $3.81 in 2012.
The gas tax surges were the result of Senate Bill 1 signed into law earlier this year by Gov. Jerry Brown, who vigorously supported the measure that will raise more than $52 billion over the next decade to help pay for extensive road-improvement programs statewide.
Public transit and other transportation programs likewise will benefit. Opponents have prepared an initiative for the 2018 ballot that would repeal the legislation.
On Monday, the statewide impact on gas prices was evident.
AAA’s daily fuel gauge report said the average price of unleaded regular statewide was $3.20 a gallon, up 17 cents from a week ago and 41 cents higher than the year-ago average.
However, energy analysts on Monday claimed that other factors, besides fuel taxes, were putting upward pressure on gas prices in California and all of the United States, which saw the average price of gas increase 6.5 cents since last week.
“It has been a frenzied week at fuel pumps across the country, but without a hurricane driving up prices, many motorists have been dumbfounded about what’s taking place with the unseasonable upward trend,” said Patrick DeHaan, GasBuddy’s head of petroleum analysis. “Such a strong weekly upward move is rare in the fall but is explained by a confluence of factors, including oil prices hitting a new 2017 high, a major pipeline leak resulting in disruption, autumn refinery maintenance, but perhaps among the more surprising, robust demand for gasoline so late in the (summer-fall) season.”
DeHaan noted that crude oil surged $1.71 on Monday to reach $57.35 a barrel on the New York Mercantile Exchange, the highest price since mid-2015.
Michael Blasky, spokesman for AAA Northern California, also noted the rally in crude oil prices and said AAA monitoring indicates “really strong demand for travel” throughout California. “The weather has been warmer, and demand really hasn’t leveled off as it normally does after Labor Day.
“It’s really kind of bad timing that things are not happening to prevent a lot of sticker shock.”
Drivers of gasoline-fueled vehicles in the Golden State aren’t the only ones taking a hit in the wallet. AAA said the average statewide price of diesel fuel on Monday was $3.44 a gallon, up 27 cents from last week and a 60-cent spike over last year.
“None of it really bodes well for motorists,” DeHaan added. “At least for now, it looks like prices will continue to go up.”
The all-time statewide high average price for unleaded regular was $4.67 a gallon on Oct. 9, 2012. That ceiling was reached during an extreme shortage of comparatively pricey summer-blend fuel, which prompted Brown to push for refineries to start making the cheaper, winter blend of gasoline for immediate release.
The record average for a gallon of diesel fuel in California is $5.15 a gallon, reported on May 30, 2008.