Why are California housing costs so high? At its most basic level, it’s a story of supply and demand-- lots of people want to live here, and there aren’t enough homes to go around.. SACRAMENTO, Calif. — California’s gas prices have a hit a five-year high, with average prices in the state reaching more than $4 per gallon, according to GasBuddy. There is an article about a missing .20c, which is what, 5% of the cost of gas, and probably a relatively minor portion of the entire tax on the gas. You’re probably wondering why gas is so expensive in California ($3.25) versus Oklahoma, which has the lowest price ($1.85)? But there are lots of uniquely California factors-- from the shape of our coastline to Proposition 13 -- that have attached a painfully expensive price tag to the California dream. But that’s not the only factor. ... We set out to explore what that looks like for real people and to answer some basic questions about why the rates are so high. Refinery issues in California can send prices spiking at that state's gas pumps almost immediately, because most California gasoline is produced within the state to meet tough anti-smog standards. So if Newsom is really interested in the reason for California’s high gas prices, he should encourage the state to build new Californian refineries. After all, California has the second highest state gas tax in the country at 55.5 cents per gallon. Gas Prices; Road Conditions; ... Power is expensive in California. So when work is stopped at any of the 10 major refineries within California, it can make a significant dent in the supply of gas, which causes prices to rise. California also places demands on the industry in terms of blending and testing that make it more expensive to ship gasoline into the state and legally sell it. California’s historic gas jump: You’re paying $1.29 a gallon above U.S. average Statewide, gasoline averaged $4.03 a gallon in the week ended Sept. 30 — up 52 cents, or 15%, in a month. But he says California has become so accustomed to these spikes that four-dollar gas doesn’t really deter drivers anymore. (Second only to Pennsylvania.) California’s gas prices are the most expensive in the United States: The national average is currently $2.65 a gallon.