SLO County’s gas prices are some of highest in the entire United States — but why?
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Record-Breaking Gas Prices
SLO County has some of the most expensive gas in the U.S., according to GasBuddy.com, due to location, real estate prices and traffic. Read more about the surge, and where to find the “cheapest” gas.
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SLO County’s gas prices are some of highest in the entire United States — but why?
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How are you coping with record-breaking gas prices, SLO County? We want to know
For six days last week, San Luis Obispo County held the undesirable title of “Most Expensive Gas in America.”
It wasn’t that unusual — despite the groans and moans from cash-strapped Central Coast drivers, San Luis Obispo County has often been home to some of the most expensive, if not the most expensive, gas in the nation.
On Monday, San Luis Obispo County drivers could expect to pay an average of $5.427 per gallon, making it the fifth most expensive region for gas in the United States, according to GasBuddy.com.
But why?
It’s not like the area is that remote — we’re situated smack dab between two major metropolitan areas with several heavily trafficked highways running across our boundaries. And yes, California’s gas prices have almost always been higher-than-average, but why SLO specifically?
Turns out, the region just happens to have the perfect storm of factors: distance from supply centers, high real estate prices and heavier traffic that likely contribute to your pain at the pump.
That coupled with the ongoing situation in Ukraine should have SLO County drivers bracing for high prices for some time to come.
Report details why SLO County gas is more expensive in general
In an Economic Vitality Commission study released in June 2019, the EVC posed the same question: Why is local gas so expensive?
The answer they found was that age-old adage: It’s all about location, location, location.
According to the report, SLO County’s median gas prices were noticeably higher than other places in California during a three-day sample period in 2019; the researchers found there was a roughly 26-cent difference between local prices and the average median price of a gallon of gas at the time.
(It’s important to note that the report in question is almost three years out-of-date, though the trends examined in it are still relevant today.)
Researchers collected data “or a variety of geographic, demographic and economic factors” for each of the cities in the sample, and examined the contributions of those factors on the price differential.
They found the largest impact to SLO County’s higher gas prices was its distance from supply hubs.
According to the report, SLO was one of the furthest spots from major wholesale gasoline distribution centers, located more than 190 miles from the major network of refineries, gasoline pipelines and supply centers in Northern and Southern California.
“This implies significant trucking costs, which we estimate adds about 12 cents relative to the other cities in our survey,” the report said.
Some other factors also likely contribute to higher local prices.
In the report, local real estate price were “the most significant explanatory variable” besides distance from supply for why SLO County’s gas is more expensive.
According to the report, San Luis Obispo was at the higher end in regards to real estate prices among the cities sampled, with prices at that time about two-thirds higher than other cities.
“This suggests that service stations pass through higher real estate expenses to customers,” read the report.
Another notable impact was the volume of through traffic in the region; as both a tourist destination and a half-way stop between Northern and Southern California with highly trafficked highways running through it, SLO County likely sees its gas prices impacted by the rate of travel through the area.
According to the report, travelers “may feel that they have little choice but to fill their gas tanks there since there are not major cities close by in either direction on the freeway.”
(South Lake Tahoe had a similar situation, according to the report.)
The report also listed other smaller factors as potential impacts: Concentrations in gas station ownership, dealer volume and storage capacity of stations could all play a role.
The report wasn’t all bad news from local drivers.
“The good news is that we found a large range of prices in San Luis Obispo, with the lowest prices offered by stations in the region only about 3 percent above the average of the lowest prices found in the 26 cities we sampled,” read the report. “This implies that residents of San Luis Obispo can benefit from looking for discount outlets and other outlets not frequented by through travelers.”
Why are gas prices higher right now?
So that’s why local gas prices are often higher than the rest of California, but why are gas prices specifically so high right now?
According to most fuel experts, the Russian invasion of Ukraine is the driving force behind recent price spikes.
According to GasBuddy, crude oil prices were up Monday, with intermediate crude costing $117.99 per barrel — a 2% increase from the past week. It was, however, below the Sunday evening peak of $125 per barrel, according to GasBuddy.
The national average gas price rose 46.5 cents in a week, and stood at $4.06 per gallon as of Monday morning.
By noon, it had already surpassed that, growing to $4.104 and in the process, breaking the previous record of $4.103, set in 2008, according to GasBuddy analyst Patrick De Haan.
The previous all-time high was set back in 2008, just ahead of the Great Recession and housing crisis, according to GasBuddy.
The national average also saw its largest ever seven-day spike, growing 49.1 cents per gallon in a week. That passed the previous record set after Hurricane Katrina in 2005, according to GasBuddy.
“Americans have never seen gasoline prices this high, nor have we seen the pace of increases so fast and furious,” De Haan said in a news release. “That combination makes this situation all the more remarkable and intense, with crippling sanctions on Russia curbing their flow of oil, leading to the massive spike in the price of all fuels: gasoline, diesel, jet fuel and more.”
De Haan said GasBuddy is expecting the yearly national average to rise to its highest ever recorded in light of recent events.
“It’s a dire situation and won’t improve any time soon,” he said. “The high prices are likely to stick around for not days or weeks, like they did in 2008, but months.”
This story was originally published March 7, 2022 at 12:38 PM.
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