.Actually the better question is why are our gas prices so low. And why wont' they stay that way.
.
You see compared to most any other industrialized nation, our gas prices (as in petrol for cars) are anywhere from 1/2 to 1/3 the price of other nations. And we whinge each time they go up.
.
So why are their prices so high.
.
Easy answer. Taxes. But there is a longer story as to why the taxes are so much higher in Europe. During the 1970s oil crises, Europe and Japan responded by increasing gas taxes massively. Jimmy Carter and Congress did not.
.
This massive tax increase significantly lowered world wide demand - which caused prices to drop. The Untied States benefited from the actions of the other players, without having to reduce our use or pay increased prices (traditional "free rider" as defined in Econ classes).
.
So, why won't this continue.
.
Well - as a percentage of world wide imports, Japan and Europe are much much smaller percent now. China, and other developing nations, use a lot more oil - so demand is soaring. Reduced use in Japan and Europe no longer lead to reduction in world wide consumption. China and India see no need to subsidized our oil thirst.
Furthermore, we have become more dependent on foreign oil (77% of US Oil was imported in 2008 versus about 45% at the peak of the 1970s). So we no longer have the opportunity of "opting out" of the world wide market - through the 1970's and even parts of the 1980s we produced tons of oil and well over 50% of the oil we used.
.
So in the 1970s - 2010 most of the US profit went to oil companies. In Europe and Japan, most of the "profit" from prices went to the government in the form of higher taxes, which promoted alternative fuels (France's huge build up of Nuclear Power), alternative transportation (electric fast trains in France, Germany and Japan) with the side benefit of promoting the adoption of high fuel economy cars.
.
The US consumer benefited from lower prices. The US consumer, making valid choices, did not move to higher fuel economy cars or embrace alternative energy. What is annoying to me is that we continue to subsidize cheap oil - through a succession of tax breaks to big oil - which promotes the use of wasteful cars and depresses alternative energy, which drives more dependence on oil from our country. So the Oil companies not only get all the profits but also much of the taxes we pay!
.
Anyway, gas is more expensive in California because the air pollution was raised to deadly levels in the 1970s, so they required clearer fuel - and California has more gas taxes. The result is analogous to Europe - although at a lower level. California cars are more fuel efficient (because of the product mix purchased, not because there are different cars) and alternative energy is more widely embraced (California produces more solar and wind energy than any other state - not as a percentage but as a pure amount of energy produced.)
.
So long story on why our gas is cheaper and why it won't stay cheaper.