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(TNS) – Gasoline prices are rising to $ 4 a gallon in Southern California, largely due to higher world crude oil prices.
The average pump price for regular gasoline in the Los Angeles-Long Beach area is set at $ 3,736 per gallon on Thursday, an increase of nearly 60 cents, or 19%, compared to to a year ago, according to the American Automobile Association.
Prices for medium and high quality blends have increased to $ 4 or more per gallon at some stations in the region.
The average price for all of California is $ 3,683 per gallon, up 18% from $ 3,141 a year ago, the AAA said. This is still well below the record of $ 4,671 set by the state in October 2012.
Part of the increase over the past year is due to a 12-cent increase in the California fuel excise tax that came into effect last November, bringing the tax up to 41.7 cents per gallon.
The large gains also come from higher oil prices. The benchmark West Texas Intermediate crude oil price for short-term delivery on the New York Mercantile Exchange rose 31 cents to 71.89 dollars per barrel on Thursday morning.
The price of the oil contract has risen more than 20 dollars a barrel, or 39%, in the last 12 months after the Organization of the Petroleum Exporting Countries and Russia have agreed in late 2016 to limit the production of crude oil and mitigate the global overabundance of oil.
The decision by President Trump this summer to reinstate sanctions against Iran, an OPEC member, has also contributed to rising prices by fears of a reduction in Iranian exports, analysts said.
Trump, in turn, continued to criticize the OPEC of 15 countries for failing to pump enough oil to drive down prices.
In his UN address on Wednesday, Trump said, "The OPEC countries are, as usual, tearing the rest of the world apart, and I do not like that. Nobody should like it … We will not stand it – these horrible prices – much longer.
Last week, Trump tweeted that the "monopoly of OPEC must bring down prices now!"
However, at a meeting of energy ministers in Algeria last weekend, leaders of OPEC, Saudi Arabia and Russia, announced that their production of oil would not be stimulated, stating that there were sufficient stocks to meet global demand.
Patrick DeHaan, head of oil analysis at GasBuddy.com, which tracks fuel prices, warned Monday that oil and gas prices are not expected to drop soon.
"With a moderate response from OPEC to the urging of President Trump via Twitter that OPEC is acting" to force prices down, "we could see a recovery in the markets of the energy as concern grows that sanctions imposed by Iran, in November, could pose a greater challenge for global supply than expected, "DeHaan wrote on the website from GasBuddy.
"With Iran oil essentially out of reach, gas prices may not know the typical decline we expected," he wrote. "It will not be good news for motorists."
California gas prices are above the national average because of the state's unique blend of fuel to meet strict state environmental laws, as well as California tax levels.
The national average price of regular gas is set at $ 2,873 per gallon on Thursday, up 30 cents, or 12%, from the previous year, reported the AAA.
Last year, the 12-cent increase in California's gas tax was intended to fund road and bridge repairs and expansion of transit projects. Critics of the top tax are trying to repeal it with Proposition 6 in the November elections.
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