Editorial | Why local gas prices won't drop anytime soon

Blame it on Trump. Blame it on the Strait of Hormuz. Blame it on oil companies or the governor - but blame won't stop the pain, as gasoline prices continue their inexorable climb.

Gasoline prices in California rose 3.7 cents per gallon in the past week, averaging $6.10 a gallon on Monday, according to GasBuddy's survey of 10,526 stations. Prices in California are 22.2 cents per gallon higher than a month ago and $1.28 a gallon higher than a year ago.

The national average price of gasoline rose 5.1 cents per gallon last week, averaging $4.48 as of Monday.

The price hikes have fluctuated in recent weeks as news reports vary on the likelihood of a deal between the U.S. and Iran. Optimism this week largely unraveled, with President Trump signaling the latest proposal from Iran is unacceptable. Oil prices then spiked upward again.

Perhaps driven by what the prices might mean for Republicans in this year's elections, Trump on Monday said he supports suspending the federal 18 cent-per-gallon gasoline tax. Any effort to suspend the gas tax would require congressional approval. The federal gas tax has never been suspended since it was implemented in 1932.

But suspending the federal tax won't mean all that much in California, where this state's limited refinery capacity makes it more vulnerable to crude price shocks, and its mandate for anti-smog gas formulations in the summer also constrains gas supplies, pushing prices higher even in less volatile times. And, California's gas taxes are higher than the national average, contributing to its nation-leading prices at the pump. Studies have shown the effective tax rate paid by Californians - regardless of income level - when buying gasoline is 45.0%. State and local charges alone are 39.0%.

Dozens of refineries in this state have closed since the mid-1980s, forcing California to import 75% of the oil it consumes. Almost one-third of that comes from the Middle East, making California more reliant on crude-oil shipments from Saudi Arabia, Iraq and the United Arab Emirates than any other U.S. state.

Without a big network of pipelines to carry U.S.-produced crude to California, the state is effectively cut off from the oil boom in Texas, New Mexico and other states. This reliance on foreign crude makes our state more vulnerable to the disruption in the strait than the rest of the country.

And California for now has received its last incoming shipment of Middle Eastern oil. Analysts say another tanker carrying Middle Eastern crude won't dock in California until months after the Strait of Hormuz waterway reopens.

Meanwhile, the state's stockpiles of refined products such as jet fuel and diesel are increasingly strained as big Asian fuel suppliers, including South Korea, slow exports to California to protect their own energy supplies.

It doesn't help that two of the state's major refineries closed in the past six months, cutting off almost one-fifth of its fuel-making capacity.

As the shortages and prices do their dance, the Trump administration used the Defense Production Act, a Cold War-era law allowing presidents to speed up the flow of goods in emergencies, to allow oil producer Sable Offshore to restart an offshore pipeline. California regulators had kept the pipeline closed following a 2015 oil spill that fouled the coastline. It is now pumping 50,000 barrels a day of crude into the state.

And, as has been much discussed in this section, the Trump administration before the Iran war was, and is, pushing to start offshore oil and gas drilling for the outer continental shelf along the coast of California, a plan that has invigorated opposition from longtime ocean and environmental advocates in this county.

Oil companies such as Chevron have said the state's policymakers are responsible for its consistently high gasoline prices. Gov. Gavin Newsom has responded that oil companies have been price gouging for years. He's now pointing to Trump's war on Iran and the closure of the Strait for the state's high fuel prices. "No amount of spin from Trump and his lackeys can cover up the fact that Americans shelled out an extra $1.5 BILLION for gas this past week because of his disastrous war with Iran," Newsom wrote in March.

What seems indisputable is that California consumers are paying for the Iran war at the pump, and they'll continue to do so for weeks, probably months, after the Strait of Hormuz is opened again to all traffic. And based on past markets, retailers are likely to keep prices high until they see evidence they're losing customers.

So, yes, most of us hope crude oil prices will return to where they were before the Iran war began. But don't expect that to happen anytime soon.

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