The market price is affected by global oil production, which is notably led by OPEC and increasingly, U.S. production; as well as demand for all refined petroleum products like gasoline, diesel, and jet fuel; the world economy; and geopolitics. For example, one of the global benchmarks for the price of oil is West Texas Intermediate (WTI), which rose to over $113 in March of 2022, an increase of more than $35 from the beginning of the year.
In terms of production levels, California crude oil production has been falling due to delays in permitting. Consequently, California refineries are importing more crude oil from other countries to supply the state’s energy needs. The additional cost to transport imported raw materials also contributes to the price of gasoline.
Importantly, Torrance Refining Company is an independent merchant refiner, meaning we sell fuel to other companies, we do not operate our own retail gas system. The illustration below provides an updated breakdown on how these factors add up to the price people pay for gasoline at the pump.
For additional information on gasoline prices, please visit AFPM: Gasoline Prices or EIA: Factors Affecting Gasoline Prices.