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2012: California's stunning year for record gasoline prices

December 31, 2012|By Ronald D. White
  • California's gasoline prices were headed for an all time record high average of $4.671 a gallon when this motorist fueled up in Alhambra. The state's average gasoline price averaged $4.028 a gallon in 2012.
California's gasoline prices were headed for an all time record high… (Frederic J. Brown / AFP /…)

Californians had the worst year imaginable for gasoline prices in 2012, averaging a record $4.028 for a gallon of regular, according to the AAA Fuel Gauge Report.

That shattered the old record, set last year, by a whopping 21.3 cents a gallon. The jump was so big that it even surprised people who review fuel prices on a daily basis.

"I can remember when the California average for the year in 2008 was $3.525 and we thought we would never see it go that high again," said Marie Montgomery, spokeswoman for the Automobile Club of Southern California.

Montgomery added that $4.028 "over a full year is a lot of money out of our pockets that we can't spend on other things."

California's prices in 2012 were also so high that they helped kick the national average for a gallon of regular gasoline up to a new record of $3.603, which broke the old record set last year of $3.510, the AAA said.

The progression of California's fuel prices in recent years is alarming as well. In 2008, the year that oil prices spiked above $147 a barrel, California gasoline prices averaged a then-record $3.525 for a gallon of regular, according to the AAA.

The California average fell to $2.687 a gallon in 2009, and then climbed back above the three-dollar threshold to $3.100 in 2010. In 2011, the state's average for the year jumped all the way to $3.815 a gallon.

Since 2009, the average price that Californians pay for a gallon of regular gasoline has jumped 49.9%.

California has some problems that are unique in terms of its fuel situation. It's an isolated market that does not have access to cheap crude flowing from the oil boom in states like North Dakota, Texas and Oklahoma.

California's only source of domestic crude from outside of the state is Alaska's dwindling North Slope oil fields. That means that California has to import more and more foreign oil, which is substantially more expensive than U.S. crude.

Analysts have cited many reasons for the 2012 prices, including one of the worst years ever for refinery outages in California.

A fire in August, for example, knocked out part of one of the state's biggest refineries. The blaze occurred at Chevron's Richmond facility.

In October, a power failure at an Exxon-Mobil refinery helped send California's average price up to a record $4.671 a gallon.

But a lot of people just aren't buying those explanations. Consumer groups and Senators Dianne Feinstein and Barbara Boxer have called on the state Attorney General and the Justice Department to investigate California's volatile fuel prices.

California refineries were also exporting fuel in 2012, and an analysis by Oregon-based McCullough Research indicated that some of California's refineries may have misled the public about the amount of fuel they were producing.

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