Driving in California may become significantly more expensive in 2025, with the cost of gasoline potentially rising by $600 to $1,000, according to a study from the University of Southern California. Professor Michael Mische from USC’s Marshall School of Business warns that this price hike will largely result from the state’s push for cleaner fuels. He estimates that Californians will need to budget an extra $1,000 to cover the rising costs of gas, as supply is expected to drop significantly while demand remains steady.
“We burn through about 38 million gallons of gas a day in the state, and that could get quite expensive,” Mische explained. He believes that the combination of decreased supply and policies aimed at reducing emissions will drive prices higher.
However, Governor Gavin Newsom’s office pushed back against the study’s conclusions. A spokesperson from the governor’s office called the report misleading, pointing out that the author has ties to the Kingdom of Saudi Arabia and the study lacks proper methodology. They also emphasized that gas prices in California were actually lower in October 2023 compared to October 2019 when adjusted for inflation.
Why Gas Prices Are Expected to Rise
The USC study analyzed a range of factors, including historical data on refineries, demand, prices, and production trends. One of the primary reasons for the price increase is the closure of a major refinery in Los Angeles, which will reduce the state’s gasoline production capacity. Additionally, new policies, such as Assembly Bill X2-1, require gas stations to maintain higher stock levels of fuel, which can add extra costs.
California’s ongoing commitment to cleaner fuels, like the California Air Resources Board’s new low-carbon fuel standard, is also contributing to the price hike. These policies aim to reduce emissions, but many residents worry about the financial burden they will place on consumers, particularly low-income individuals.
“I’m concerned about the impact this legislation will have on lower-income residents. It will force people to change their consumer behavior,” Mische said.
Impact on Consumers
As gas prices rise, some Californians have already started to adjust their driving habits. San Diego residents like Gayle Guest and Otis Bradley have shared their frustrations, noting that the high cost of fuel is making it difficult to fill up their cars as often. “It used to be that I would pull up to the pump and fill up, but now I put in $20 and have to be careful about when to stop,” said Bradley.
In San Diego, the average price of gas is currently $4.54 per gallon, significantly higher than the national average of $3.06. Mische estimates that gas prices could rise by as much as $1.15 per gallon in the coming months, leading to higher costs for daily commutes and long-distance travel.
While some support the state’s environmental goals, others question whether the approach is the best way forward. “I love the concept, but I’m not sure it’s the right way to go about it,” said Guest, reflecting concerns shared by many who feel the policies are pushing the cost of cleaner air onto consumers.
In the face of these rising costs, Californians may need to adjust their driving habits or search for more fuel-efficient vehicles to keep up with the state’s evolving energy landscape.
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