Gas Prices In California Spike Above $4, The Highest In 5 Years

Californians are paying an average of $4.18 for a gallon of gas, the highest price in five years. In contrast, the average American pays $2.65 a gallon while at the pump.

Approximately seven out of 25 oil refineries on the West Coast are currently down or at a lower production capacity, which has caused prices to spike in California. The state also has more environmental regulations on gas refineries, which makes production more costly.

In addition, California lacks pipelines to connect it with oil-rich states such as Texas, which affects supply.

The gas price tracking company Gasbuddy said Monday on its website that refineries on the West Coast have seen "notable issues," with refinery capacity dropping 8%. Gasbuddy added that "refiners on the West Coast will likely recover slightly this week."

"Motorists in California are urged to hold off on filling their tanks as prices are likely to begin dropping this week, perhaps totaling a 50 cent drop over the next month," the company stated.

The West Coast also has a unique situation in regards to energy, as 47% of Saudi Arabia's daily oil exports head to the region. The rest of the U.S. is increasingly less dependent on foreign oil due to extraction methods such as fracking.

The U.S. is the top crude oil producer in the world as of 2018, accounting for 18% of global production. Saudi Arabia produced 12% that year, with Russia at 11%.