"Our gasoline market looks more like OPEC than like Adam Smith's vision of competition. To reduce prices through the supply side, we need to make that supply more competitive. Three strategies can help us get there."
"California has already cut annual gasoline consumption by 13% since 2019. But cars and trucks take years to replace. In the meantime, demand-side strategies are not enough on their own to meaningfully curb prices at the pump."
"Refineries turn crude oil into gasoline and other products. And just four companies hold 90% of California's refining capacity, giving them tremendous market power."
California experiences persistently high gas prices due to market concentration rather than simple supply-demand imbalances. While reducing gasoline demand through public transportation, walkable neighborhoods, and electric vehicles has cut consumption by 13% since 2019, these demand-side strategies alone cannot meaningfully lower prices. The core problem lies in California's gasoline market structure: four companies control 90% of refining capacity, creating an oligopoly similar to OPEC rather than a competitive marketplace. To effectively reduce prices, California must implement supply-side reforms that increase market competition among refineries. This requires breaking the concentrated control that gives dominant refiners tremendous pricing power.
Read at www.mercurynews.com
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