Retail gasoline prices in California decline from recent highs (10/30/2019)

On October 7, 2019, average California regular retail gasoline prices surpassed $4 per gallon (gal) for only the second time since 2014. The last time prices reached this level was in May 2019 as a result of planned and unplanned refinery outages in California. Crude oil prices are generally the primary driver of gasoline prices. However, California’s petroleum markets are isolated from the rest of the United States because of its lack of petroleum infrastructure connections to the rest of the country, so unplanned refinery outages in the state can have larger price impacts there than in other areas of the country. Planned refinery outages do not typically drive large price increases because refineries prepare ahead of outages to ensure adequate inventories and alternative sources of supplies are available. They do, however, place additional pressure on gasoline supply in a state with limited supply options. In addition, California requires a different gasoline specification than the rest of the country, further narrowing supply options. ... More »