In recent weeks, some of you may have noticed a series of advertisements running on cable news networks in particular, sponsored by some supporters of the Democratic Party. They feature a series of “Thank Joe Biden” themes, primarily highlighting the hilariously named Inflation Reduction Act and claiming that Biden’s actions have been “lowering prices” while encouraging people to donate to elect more Democrats. But are people really falling for this? Have you noticed prices getting any lower? The White House Press Secretary keeps saying that gas prices are coming down thanks to Democratic policies. It’s true that gas prices did dip for a while over the summer, but anyone who has had to fill up their tanks recently already knows all too well that the trend was short-lived. This is particularly true in California, where gas prices have now once again risen every day for more than a month. CBS Los Angeles certainly noticed and this week they set the record straight. The reality is that gas prices in the Los Angeles area are once again threatening to break the record levels that were set as recently as June of this year.
For the 28th day in a row, gasoline prices have increased in Los Angeles. The 12.2 cent increase occurred overnight, bringing average prices close to record highs previously set in June — now sitting at $6.38.
The record, $6.46, was set on June 14, the last day of growth before a brief period of decline. However, prices have once again been on the upward trend, climbing $1.13 cents over the greater part of the last month, including the largest one-day jump since 2012, when average prices skyrocketed 15.3 cents on Thursday.
Numbers increased throughout the Southland, with Orange County experiencing an average spike of 13.5 cents, now sitting at $6.38.
Speaking as someone who regularly follows the newsletters issued by major energy industry analysts, I can assure Californians (and the rest of the nation as well) that the forecasts do not indicate this trend of increasing gas prices stopping any time soon. That record of $6.38 will almost certainly be broken this month and will likely continue to slowly climb until at least Christmas. That will be just in time for everyone who plans to travel to see their families over the holidays. And it will also encompass the midterm elections.
Ed recently published an explanation of how inflation actually works and why energy prices are volatile. It’s a complicated formula with factors that vary between various regions of the country. California is particularly vulnerable to energy price spikes for several reasons. For one thing, refineries located in the state have recently gone offline for “unplanned maintenance” which was driven in part by the state’s constantly shifting regulations on the oil and gas industry. At the same time, gasoline being imported from other parts of the country is less available and more expensive.
One spokesman for AAA was quoted as saying, “Until the state receives significant amounts of imported gasoline and local refineries are fully operational again, we will likely continue to see pump price increases.”
The state government is trying to place the lion’s share of the blame on the war in Ukraine, of course. And those disruptions have definitely created a ripple effect that is impacting the oil and gas market around the globe. But that’s far from the only reason and it’s not the largest driver. California has long enforced an “environmental” mandate saying that cheaper “winter blends” of gasoline can not be sold in the state during the summer to reduce smog levels. Those winter blends can’t be legally sold until November, so Californians are paying the price for only being able to accept specific gasoline blends rather than whatever is commercially available.
Current energy policies in Washington have given the oil and gas industry no confidence or motivation to expand refinery capacity or increase production levels. And even fi they wanted to ramp up drilling, the Biden administration has continued to routinely cancel drilling leases and increase the cost of obtaining such permits. So the gasoline we do manage to produce winds up being even more expensive as supplies are diminished.
You can blame Vladimir Putin for any number of bad things going on in the world today and I’ll be right there with you. But he is not the main driver of the pain that consumers are feeling at the pump these days. This is a self-inflicted wound that could be addressed if the political will existed to do so. Sadly, the policies of the current administration are doing the exact opposite.