Gas prices in California are soaring to record levels as the holiday season approaches, combining with supply chain problems that have left some goods in short supply and mounting inflation to create a distinctly unfestive strain on many people’s wallets.
Statewide, the average price of a regular gallon reached an all-time high of $4.682 on Monday, according to the American Automobile Assn. Experts are not sure how high pump prices will go, but it’s going to further squeeze consumers who hope for a more normal holiday season of road trips to family gatherings and drives to shops to purchase presents.
“It’s not just the gas, it’s everything,” said Monica Oliva, 36, as she filled her bright orange sedan at the station.
Oliva said she and her family had been planning to visit relatives in San Francisco for the holiday — part of an annual tradition to travel during the days off — but decided to cancel after one too many mounting costs made the whole endeavor seem impossible.
“We saw all the prices increasing — it’s crazy,” she said. “Even the carne asada at the market is $25 to $36, so we were like, ‘OK we have to change our plans to make [Thanksgiving] affordable.'”
Monday’s gas prices marked the state’s second record-breaking day in a row. The price for regular unleaded was six-tenths of a cent higher than the Sunday average reported by the AAA, breaking the previous state record of $4.671 set in October 2012.
Still, experts said most people are not highly reactive to fluctuating gas prices, and many are dead-set on making the most of this year’s season. The Auto Club is projecting that about 3.8 million Southern Californians will drive to their holiday destinations this year — a 9% increase over 2020 and within striking distance of pre-pandemic levels.
If the numbers materialize along with air travel projections, it will mark Southern California’s second-busiest Thanksgiving travel volume on record, and just 3% less than the all-time record of 4.5 million local Thanksgiving travelers set in 2019, according to the AAA.
“For the vast majority, people are still going to be taking road trips — especially this year — to reconnect with their loved ones,” said AAA Southern California spokesman Doug Shupe. “People are so looking forward to getting out there and having that traditional Thanksgiving again with their friends and their family.”
Shupe said the soaring gas prices are being driven primarily by higher crude oil costs and increased demand for fuel. A barrel of West Texas intermediate crude on the New York Mercantile Exchange closed at $80.79 on Friday — more than double its 52-week low.
“We had really, really low demand during the pandemic, and then it just ramped up rapidly as more and more people became vaccinated,” he said. “The desire to get out there and travel really picked up quickly.”
Prices also surged in several counties, including Los Angeles, where they climbed to $4.672 Monday — nearing the record of $4.705 set nine years ago.
That number is about 7.9 cents more than it was one week ago, 20.8 cents more than one month ago and $1.52 more than one year ago, according to the AAA.
What’s more, California’s numbers have surpassed those of the nation, which hovered at an average of $3.415 per gallon on Monday. The all-time average high nationwide, $4.114, was set in July 2008.
UC Berkeley energy economist Severin Borenstein said oil prices dropped from about $60 a barrel to $30 when the pandemic started but have come back up as the world economy has rebounded. Some California-specific environmental programs, including the cap-and-trade program and low-carbon fuel standards aimed at reducing greenhouse emissions, also add a “small kick” to the state’s prices.
AAA spokesman Jeffrey Spring said the recent heavy rains were also partly to blame for California’s surging prices after the state’s oil refineries were “inundated with water,” affecting production. The atmospheric river in October broke several records as it dumped a deluge across the state; Spring said it was not unlike the disruption experienced by some Louisiana refineries after Hurricane Ida.
And though the backlog at the ports of Los Angeles and Long Beach is creating a massive headache for consumer goods that could bleed into Christmas, it’s not having much of an effect on gas prices, said Borenstein, as oil and gas entering the state come through specialized ports.
Borenstein said the only real long-term solution is to effectively drive down the demand for oil. California has made some steps toward those reductions — including Gov. Gavin Newsom’s $15-billion climate package, which allocated $3.9 billion for electric vehicle investment and infrastructure, among other items.
President Biden’s historic $1-trillion infrastructure bill, signed Monday, also includes allocations for public transportation and electric cars in California.
Those changes will take years to implement, Borenstein said, but there is reason to be optimistic.
“The best information is that oil prices are higher now than they will be a year or two from now — that they will gradually come down,” he said.
That is little comfort to people trying to balance their checkbooks now.
“Everything’s skyrocketing,” said Damian Maculam, 29, who was gassing up a van downtown. Maculam said the van rental company he works for enables him to fill only $50 at a time, which used to be enough but now provides substantially less than a full tank. Most vans are delivered to clients half-full.
Maculam said he’ll be spending Thanksgiving with his father in Los Angeles but lamented that it will mark the second holiday in a row that he hasn’t felt safe enough to fly home to Hawaii to finally meet his sister’s baby, who was born in May of 2020.
Meanwhile, those hoping to wait it out until December might also be out of luck: Though crude prices could ease up a bit in the weeks to come, demand is probably going to stay strong for the next couple of months, said Shupe, of AAA Southern California.
“We really don’t know when we’re going to see them starting to lower,” he said of gas prices. “It’s possible we could see higher prices with us through the holiday season.”
For some, lower prices can’t come soon enough.
“I usually don’t pay that much attention, but this is alarming,” said Karim Howard, 27, as he filled up his Volkswagen Golf at a Shell station in Carthay Circle, where the price of a regular gallon was $5.99 on Monday.
Howard opted to put $10 — less than two gallons — into his car to get him through some errands, he said. He hoped it would be enough to get him to Costco at the end of the day, where he anticipated saving a few dollars when he filled up the rest of his tank.