Gas Stations and Prices

December 11, 2023


Energy Institute Faculty Director, Severin Borenstein, and Faculty Affiliate Lucas Davis are referenced in Politico regarding their research on gas prices in various locations.

“UC Berkeley logged a clue today in the quest to solve California’s mystery gasoline surcharge, publishing an analysis that found more gas stations meant lower prices at pumps in Mexico.” Davis’ “study looked at new gas stations built in Mexico over five years ending in 2022, finding that adding more gas stations reduced prices. They even factored in bathroom cleanliness, finding it didn’t disrupt the trend.”

“For the uninitiated: California’s mystery surcharge is what UC Berkeley economist Severin Borenstein calls the portion of California’s extra-high gas prices that isn’t explained by the state’s stringent environmental and refining standards…The mystery has a climate dimension: The California Energy Commission is trying to keep the energy transition palatable by avoiding price fluctuations while the state weeds out fossil fuels. Newsom ordered the commission to find out whether oil refiners are responsible; the refining industry has said the state should add more gas stations and increase supply if it wants to lower prices.”