-October 24,2019-
Gas prices are on everyone’s mind this fall but AAA says this week they are finally dropping across California. Gas price averages tumbled by 10 cents a gallon in Los Angeles and the statewide average is now $4.10 a gallon for regular unleaded – seven cents lower than last week says AAA.
Meanwhile the state Energy Commission(CEC) just put out a report on why our California gas prices are higher by about $1 more than the national average. The concluded that consumers are willing to pay the higher prices due to concentration of” market power” – translation- lack of competition.
They point to substantially higher prices being offered by the top brands in the state – Chevron,Shell and 76.”While all retailers in California have increased their retail margins above the national average, higher-priced brands such as 76, Chevron, and Shell have increased those margins far beyond their competitors” says the October 21 CEC report.
These top brands have market power in Visalia for example with 18 location in town.Easy to find. But as to the low price leader in Visalia- Costco, there is only one location.
For some reason the lowest prices for a fillup in California are in Lemoore and Farmersville, with Lemoore sporting the three lowest prices gas options in the state according to Gas Buddy.Competition here seems alive and well.
According to AAA, the state’s average price for a gallon of gasoline recently was $4.14, while the national average was about $2.65. That’s a difference of $1.49. Are California’s high gas taxes to blame?
Critics of California say the difference is high gas taxes in the state compared to other states. The state gas tax stands at 47 cents since July, up from 41 cents as of Nov 2018. But gas prices at the pump this July were $3.44 compared to $4.14 today. That’s a 70 cent jump in what we had to paying recent months but no increase in tax!
Even within the state there are cluster of stations in towns that are always lower than the state average like those in Lemoore, 80 cents lower a gallon than the state average. Sure Lemoore has an Native American-owed station but local independents compete with them successfully.
Perhaps the secret is for cities to zone retail corners in their community for four gas stations to boost competition.That might be better that what the Wall Street Journal suggested recently. Move to Texas.
Caption: Hypermarket category is Costco/Safeway gas stations
