Gas prices continue to plummet all over United States. Curiously, California's gas rate for consumers is not keeping up with the downward trend.
The questionable aspect arises from the gap of the wholesale gas price to the retail gas price. Albeit a dollar lower than last year, California's retail gas price falls at $2.69 a gallon, one of the highest in the U.S. Ironically, California oil companies buy gas at $1.26 per gallon, one of the lowest in the U.S. (via CBS News).
So why are California's gas consumers being priced at a high gas rate compared to other states in the nation? This is what Consumer Watchdog seeks to find out.
According to a trade group representing western U.S. oil companies as per CBS News, investigations and analysis have sought to determine the reason behind the California wholesale and retail gas price discrepancy. They have all concluded that market factors have caused the spiking up of gas prices in the state.
Consumer Watchdog disagrees. They deem that oil companies are manipulating the market by refining only few amounts of gas even when they can refine more. The less competitive market results to a higher retail gas price.
Nonetheless, lower wholesale prices are expected to dampen retail gas prices for about a month. No need to worry for California residents because the state's attorney general, Kamala Harris, has taken the matter to her own hands and has been investigating the price situation (via CBS News).
According to The New York Times, the oil industry in the U.S. is experiencing its sharpest price decline since the 1990s. An oil barrel that used to cost $90 or $100 is now only at around $42. It will continue to go down, as predicted by the oil market.
As per Parent Herald, a study found out the Americans are spending more than setting aside the price they save from buying low-cost gas. Instead of the saved cash reaching bank accounts, most Americans use it for other luxuries such as eating outside or watching a movie.
What do you think is the reason behind the gap between retail and wholesale gas prices in California? Sound off your thoughts in the Comments section and follow Parent Herald for more news and updates.
