Where San Francisco gas prices stand two years after historic high

Two years since San Franciscans’ pain at the pump rose to a historic high, gasoline prices in The City have largely eased. But they still remain among the priciest in the nation.

Experts say it’s tough to predict where gas prices will trend into the summer months because of how many variables remain in flux. The good news, they said, is that if gas costs remain exorbitant in California, that could further fuel people’s eagerness to switch to electric vehicles .

In mid-June 2022, two historic events coincided — a surge in travel brought on by relaxed COVID-19 restrictions and the beginning of the war in Ukraine — causing gas prices to rise to the highest they’ve ever been, peaking at a nationwide average of $5.02 per gallon on June 14 .

One June 13, 2022, San Francisco reached its all-time high gas price of $6.64 per gallon. Two years later, prices plunged to $3.45 nationwide and $5.08 in San Francisco , slightly up from $5.01 in 2023. Costs across the country have fallen in recent weeks due to an unusual decline in demand for gas since Memorial Day.

AAA spokesperson John Treanor said the highs of 2022 reinforced to the company just how dramatically global politics and consumer habits can affect oil prices.

“Since then, we’ve seen everyday life change for Americans,” Treanor told The Examiner. “We’ve seen more remote work stick around. We’ve seen people maybe change their buying habits or spending habits around gasoline. We’ve seen people change the way they drive.”

He said the surge of 2022 forced consumers and analysts to view gas prices through a new standard. Historically, $5 per gallon is steep in San Francisco, but it has been the average for much of the past two years.

The summer of 2022 also solidified how much gas prices affect electric-vehicle sales, rather than vice versa. That’s of particular significance for San Francisco, which aims to ban the sale of gas-powered cars by 2035 .

Severin Borenstein, a professor at UC Berkeley’s Haas School of Business, said electric-vehicle sales are unlikely to ever impact the price of gas, no matter how many people buy them. This is primarily because the number of oil refineries is declining as gas consumption wanes.

“I think that as we get into the very low gasoline demand — and I hope we do — we’re also going to have very few refiners, because more and more of them are going to exit the market,” he said. “We might see a small depression in those margins, but I think it would be very difficult to pick out of the data.”

If anything, Borenstein said, there’s concern that as the amount of refineries decreases, the few remaining will be more empowered to manipulate the price of gas.

However, both he and Treanor agreed that evidence suggests lofty gas prices have contributed to more electric-vehicle adoption across the country.

Researchers at UC Davis published a study in March 2022 that found that gas prices have a bigger effect on electric-vehicle adoption than the cost of electricity. The more expensive gas is, the more people purchase electric vehicles.

Treanor said that in the immediate aftermath of the 2022 gas-price hike, electric-vehicle sales spiked nationwide. However, AAA released a consumer survey last week that found interest in EVs was down to about 13%.

Of course, The City remains a leader in electric-vehicle adoption. Last year, zero-emission vehicles accounted for an estimated 37% of all new-vehicle registrations by residents — four times more than any other U.S. county, according to the San Francisco Environment Department.

Treanor said AAA doesn’t predict where gas prices head, but noted that Memorial Day was the busiest travel day for Americans during that holiday in almost 20 years, which indicates this summer will follow a similar trend.