Local gas prices soar with fluctuating global oil market

Local gas prices soar due to fluctuating oil market
Published: Sep. 15, 2023 at 9:45 AM PDT
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RENO, Nev. (KOLO) - While you drive around town or at the pump, you might have noticed an increase in prices. West Coast gas prices are $1.50 higher than the rest of the country. Here in Washoe County the average gas price is $5.17, compared to $4.74, the Nevada state average.

“California, since about 2015 has had significantly higher prices than the rest the country,” said Elliot Parker, the chair and professor of Economics at UNR. “Part of this is that we’re an energy island, we’re not connected with pipelines to the rest of the country. So California imports oil from places like Saudi Arabia and Ecuador and Colombia.”

Aside from location, there are major factors that contribute to the surge in price. Five companies control almost all of California refineries and their capacity cannot keep up with the demand. California requires a special seasonal blend of gas that decreases air pollution but increases cost and limits opportunity for market competition. California, similar to Washoe County, has a high excise tax on gas, which is nearly double the national average.

“Part of this is, you got countries like Saudi Arabia and Russia trying to keep supply tight in order to prevent prices from falling,” said Parker. “But the second part is things happen, for example, just a week ago, there were major floods in Libya. And those major floods in Libya shut down an oil producing port.”

The market responded with an increase in price. People in Washington and Oregon are paying big bucks at the pump too. Experts say you can expect a decrease in price within the next two months.