Gas prices hitting new heights in Sonoma County and beyond. Here’s why
The thought of paying $5 for a gallon of gas once seemed far fetched, but these days Sonoma County drivers are now enduring the reality of spending closer to $6 per gallon.
The North Bay, like other parts of California and the country, can only watch gasoline prices skyrocket as the world oil market continues to be shaken by Russia’s invasion into Ukraine.
As of Tuesday, the cost of a gallon of regular unleaded fuel at stations across the region varied from $5.19 to as much as $6.39, according to gasbuddy.com.
Higher-priced gas stations, such as Chevron and Shell, saw very little business, while lines of consumers stretched from less-expensive spots run by Safeway and Costco.
Windsor resident Martin Woods, 58, was among the few drivers pumping fuel for $6.39 per gallon at the Santa Rosa Chevron at Mendocino Avenue and Steele Lane Tuesday evening. He said he was reluctantly showing loyalty to his regular fuel stop.
“Last week I paid about $40 for a tank, now it’s nearly $70,” he said as he topped off his Kia Forte. “I’m not sure how long I can do this. I hope everything gets better soon over there (in Europe).”
Economic impact of conflict hits home
Crude oil is a world commodity that is influenced by world events, experts say.
Russia is the world’s second-largest crude oil exporter behind Saudi Arabia and mostly exports to Europe. A minimal amount is exported from Russia to the United States, but any impact to supplies can have a negative domino effect on other nations.
“Disruption in one part of the world affects prices everywhere,” said Andrew Campbell, executive director of UC Berkeley’s Energy Institute at the Haas School of Business.
The bottom line, experts stress, is the cost of oil drives the cost of driving.
A month ago, oil cost about $90 a barrel, but because of the ongoing conflict in the Ukraine it is now around $130 a barrel.
“Presidents, regardless of political party, have little influence on the oil market because it’s a global industry,” said Aldo Vazquez, a spokesman for the American Automobile Association.
Is COVID-19 playing a role?
Gasoline prices had already surpassed $4 per gallon even before the European conflict began on Feb. 24 and that’s attributed to recovery from the coronavirus pandemic.
Fuel production dropped dramatically after March 2020 when the pandemic forced people to stay home and reduced travel.
Now, as stay-home orders have been lifted, fuel production has restarted. Nevertheless, it hasn’t been able to keep pace with demand, Vazquez said. That led to fuel prices rising beyond $4 per gallon last year.
In Feb. 2021, Santa Rosa drivers were paying an average of $3.85 per gallon, according to AAA. But last month, that average had increased to $4.82 per gallon.
Travel season may still be months away, but experts are warning it could create fuel demand that will further ramp up gas prices.
Furthermore, refineries need to switch to summer blend gasoline, which burns at a cleaner rate in the warm months but adds about a dime per gallon to the cost.
Vazquez said online bookings show a lot of people will be hitting the road this year.
“Demand is going to likely go up this summer because (after two in a pandemic) people are ready to travel,” he said.
Why is gas more expensive in California?
As of Tuesday, California had the most expensive gasoline in the country with a record-setting average price of $5.44 per gallon, according to AAA.
That’s well above West Virginia, which had the lowest state average of $3.98.
Experts say California’s fuel prices can be attributed to reformulated gasoline that burns at cleaner rates in order to protect the environment.
The reformulated gas has been used for about 30 years and is credited with improving air quality in Los Angeles.
“California gasoline prices are generally higher and more variable than prices in other states because relatively few supply sources offer California's unique blend of gasoline outside of the state,” according to the U.S. Energy Information Administration.
It wasn’t immediately clear exactly how much the special fuel adds to the cost of driving.
The cost of driving, however, is worsened by taxes and fees, according to the EIA.
Stillwater Associates, an Irvine-based transportation fuels consulting firm, estimates drivers pay about $1.28 per gallon in taxes and fees.
Why is gas more expensive in the North Bay?
Historically, metropolitan areas like the Bay Area and Los Angeles have had the most expensive fuel in California.
San Francisco and Santa Rosa gas stations charged an average of $5.57 per gallon Tuesday, whereas farther inland areas like Modesto and Yuba City had averages closer to $5.20 per gallon.
Jerry Nickelsburg, a UCLA adjunct professor of economics, said property values play a role in what gas stations charge for fuel.
“Land prices. Pretty simple,” he said. “If you want to build a gas station in Beverly Hills, you’re going to pay more for the land than if you want to build a gas station in Fresno. You’re going to have to recover that investment.”
Campbell added prices can also be higher in urban area if there are fewer gas stations.
What can Sonoma County consumers do?
Experts say the Russia-Ukraine conflict has caused much uncertainty. As a result, many are reluctant to predict exactly how high gas prices might go.
“In the coming weeks, we will get a better picture as to where oil prices are going to be settling,” Nickelsburg said. “We think, in the coming months, we’re going to start to see an easing of oil prices. They’re going to be coming down fast.”
Travelers are encouraged to shop around for lower gas prices.
Sources such as gasbuddy.com allows users to input cities or zip codes and find neargby gas stations with the lowest prices per gallon.
You can reach Staff Writer Colin Atagi at email@example.com. On Twitter @colin_atagi