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The national average price for gasoline has now surpassed $4 per gallon, while California’s statewide average is hovering just below $6.

In several locations across the state, prices have climbed even higher, widening the gap between California and the rest of the nation.

As consumers question why California continues to pay significantly more at the pump, analysts point to a combination of long-standing state policies and factors that remain less clearly understood.

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Dr. Severin Borenstein, faculty director of the Energy Institute at Haas at the University of California, Berkeley, said California’s higher fuel taxes, environmental fees, and unique gasoline blend account for roughly half of the price difference compared to the national average.

However, he said those factors alone do not fully explain the current price gap.

“The difference is what I call the mystery gasoline surcharge,” Borenstein said.

According to Borenstein, prior to 2015, California gas prices generally tracked closer to the national average, with an additional 90 cents to $1 per gallon attributed to the state’s taxes and environmental requirements.

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Since then, the spread has widened to around $2 per gallon above the national average, leaving a portion of the increase unexplained.

He said that since 2015, the additional costs paid by California drivers beyond what can be justified by taxes and environmental policies have totaled tens of billions of dollars.

“Since 2015, California’s additional payments for gasoline, above what’s justified by taxes and environmental costs, amounts to over $60 billion,” Borenstein said.

Borenstein identified several contributing factors that account for part of the difference.

Limited refining capacity within the state and the requirement for a specially formulated, cleaner-burning fuel contribute to a portion of the higher costs.

Even so, those elements only explain part of the increase.

“Most of the differential actually occurs downstream, somewhere in the distribution, marketing and retailing of the gasoline,” Borenstein said.

California’s refining capacity has declined in recent years, adding pressure to supply.

A major refinery near Los Angeles shut down last year, and the Valero refinery in Benicia is expected to close this month.

The reduction in refining operations has raised concerns about the state’s ability to maintain adequate supply, particularly during periods of increased demand.

Borenstein said that the loss of refining capacity, combined with uncertainty surrounding the availability of additional oil imports, could lead to further price increases.

In response to the ongoing price disparities, state officials have launched an investigation.

The California Energy Commission has established a new division tasked with examining what has been described as the “mystery surcharge” affecting gasoline prices.

The investigation is expected to focus on the supply chain beyond refining, including distribution networks, marketing practices, and retail pricing.

As global oil markets continue to react to geopolitical developments, including disruptions tied to the conflict involving Iran, analysts say price volatility is likely to persist.

For California drivers, those broader pressures are being layered on top of state-specific factors that have long contributed to higher costs at the pump.

The combination of international market conditions, reduced refining capacity, and unresolved pricing factors within the state continues to shape the gap between California gas prices and the national average.

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