California gas prices near $5 average as Russia-Ukraine crisis persists

This post first appeared on San Gabriel Valley Tribune - California News on . You can read the original article here.

By Brianna Taylor and David Lightman | The Sacramento Bee

California gasoline prices hit another record Thursday and are inching toward $5 a gallon — a level that could persist as Russia moves troops into Ukraine.

“California could stay near or above $5 a gallon for a few months. It could get worse than that if Russia further inflames the situation,” said Patrick De Haan, head of petroleum analysis at GasBuddy, which monitors prices.

Sanctions by western nations against Russia because of its action in Ukraine are expected to only drive up the price of oil.

California’s average price for a gallon of regular gasoline Thursday sat at $4.77, according the the American Automobile Association.

Some Crude oil prices have been flirting with the $100 a barrel level this week, well above the $50-$60 a gallon levels of a year ago.

Sanctions imposed by President Joe Biden and other world leaders could mean tighter supplies, since Russia provides about 10% of the world’s oil. It’s the world’s third-largest producer of petroleum and other liquids, behind the United States and Saudi Arabia.

Adding to the mix is the anticipated increase in consumption as weather improves and people begin traveling more. Already, prices have been driven up by increased demand.

“The seasonality that causes prices to swell is just getting started,” De Haan said.

One reason California’s gasoline prices remain the highest in the nation are its taxes.

State motorists pay the highest fuel taxes in the country, according to the American Petroleum Institute. As of Jan. 1, the combined state and federal motor fuel taxes and fees paid in California was 86.55 cents per gallon. Next highest was Illinois at 78 cents. The US average was 57.09 cents per gallon.

Over the last few days, some members of Congress have proposed suspending the federal gasoline tax, which has been 18.4 cents a gallon since 1993.

Rep. Josh Harder, D-Turlock, is among those who is proposing a gas tax holiday. Money collected from the tax helps fund road projects, and Harder’s legislation would have that money come from general federal revenues instead.

Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, doesn’t like the idea.

“Robbing Peter to pay Paul would still increase the size of our massive federal debt and undermine efforts to assure sustainable infrastructure financing,” she said in an op-ed in The Hill.

In California, Gov. Gavin Newsom last month proposed suspending the gasoline and diesel fuel tax inflation-related increases expected in July. He also said in his budget plan that scheduled increases in 2023 and 2024 could also be delayed “should economic conditions warrant it.” His proposals are still pending.

The following metros hit record-high average gasoline prices on Thursday, Feb. 24, according to the AAA:

LOS ANGELES

Highest recorded average: $4.82 per gallon as of Feb. 24.

SAN DIEGO

Highest recorded average: $4.78 as of Feb. 24.

SAN FRANCISCO

Highest recorded average: $4.92 as of Feb. 24.

OAKLAND

Highest recorded average: $4.83 as of Feb. 24.