L.A. gas prices drop more than 20 cents from July highs
After soaring well above the rest of the nation, the average gasoline price in the Los Angeles region fell almost 25 cents below their highs of a month ago.
The average price for a gallon of regular gasoline in the L.A. area Monday stood at $3.81, according to AAA. In mid-July, AAA’s survey found the average price for the region reached a high of $4.05 a gallon.
Analysts attributed the drop to falling crude oil prices and increased production at U.S. refineries.
“Even with the extraordinary price spikes in California earlier this summer that inflated the national average, improving conditions there have brought the state average from its mid-July peak,” said Gregg Laskoski, a senior petroleum analyst with the GasBuddy price-tracking website.
Added Patrick DeHaan, another senior petroleum analyst with GasBuddy: “It’s a trend we expect to continue.”
Overall, Americans are paying about 88 cents less for a gallon of gasoline than they were a year ago. The difference for Californians is about 31 cents compared to last year.
Gasoline prices in California typically run higher than the rest of the nation because of the environmentally friendly blend produced for the state.
But gasoline prices in the L.A. area rose steadily during the first six months of the year and surged in July as production at California refineries fell and inventories declined.
A significant part of the problem was Exxon Mobil’s Torrance refinery, which has been producing less than 20% of its typical capacity following an explosion at the facility in February. That refiner represents 10% of the state’s refining capacity and 20% of Southern California’s capacity.
Per-gallon gasoline prices in the L.A. area climbed as much as 50 cents more than other areas of the state and $1.50 more than other areas of the nation.
Some refineries, such as Chevron and Tesoro, saw their gross profits soar. California Energy Commission data showed the refineries’ overall take reached a record high of $1.61 during the week of July 13.
The high gasoline prices prompted Consumer Watchdog and billionaire environmentalist Tom Steyer to urge lawmakers to establish new mandates for refiners to prevent abnormal price increases.
Those proposals include requiring oil companies to disclose profits on gasoline refined in California and to alert the public about planned maintenance and outages at their refineries; to maintain a minimum level of gasoline reserves to prevent price spikes; to face higher penalties for illegally conspiring to increase gas prices.