Why Gas Prices Could Rise Even Further in California | KQED

"California requires that cars burn a specialized fuel blend, shipments can be tougher to source and take longer to arrive, exposing consumers to delays and volatility every time something goes wrong globally. "Continuing to move to more and more imports will put this state at more and more risk," Muller said last week. "If you think we are in a precarious position right now, we will continue to see more and more volatility.""

"Asked what consumers should expect if the conflict drags on, Gunda said California prices will likely settle "under seven, more like $6.50." He explained that demand starts dropping once gas crosses about $5.50 a gallon, and California is already seeing drivers shift from higher-priced stations to cheaper ones. Borenstein is less optimistic."

"If the Strait of Hormuz, the narrow waterway that carried more than 20 million barrels of oil a day before the start of the war, stays closed another 60 days, the price of crude could climb by another $40 to $80 a barrel, he said. Each $40 increase translates into about $1 per gallon at the pump. He called that scenario plausible, and warned there's almost nothing California policy can do about it."

California’s fuel system faces supply challenges because state requirements mandate a specialized fuel blend that is harder to source and slower to deliver. Oil industry representatives argue that increasing imports is a risky strategy that could expose consumers to more volatility, especially during global disruptions. Economists dispute claims that state policies weakened the system, but they acknowledge that delays and sourcing difficulties can affect prices. If demand falls when prices exceed about $5.50 per gallon, California prices could settle near $6.50. A prolonged closure of the Strait of Hormuz could raise crude prices by $40 to $80 per barrel, translating to roughly $1 per gallon at the pump, with limited policy options to counteract it.

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