May 5 (Reuters) - Drivers in California pay higher

prices at the pump than any other state in the country due to

supply issues, costs from environmental compliance and fuel

requirements, and high state taxes and fees, the U.S. Energy

Information Administration said on Monday.

In March, costs from Californian environmental programs such

as Cap-and-Trade and the Low Carbon Fuel Standard added as much

as $0.54 per gallon, the latest data showed.

Consumers in California also pay around $0.90 per gallon in

taxes and fees as of March, the highest in the country, the EIA

said.

WHY IT'S IMPORTANT

California is the largest U.S. gasoline market but several

fuelmakers have ceased operations at less profitable facilities,

citing regulatory challenges and market dynamics.

Six plants have shut since 2008, two of which have converted

to producing renewable fuels.

The state will likely see even higher gasoline prices as

refinery closures put pressure on fuel supply and force the

state to rely more on imports from countries like India and

South Korea.

Retail prices for regular grade gasoline in the state often

exceed the national average by more than a dollar per gallon,

the EIA said.

CONTEXT

In October, California Governor Gavin Newsom signed into

effect ABX2-1, a bill designed to prevent fuel supply shortages

in the state that gives regulators more control over inventory

levels for refiners.

Shortly after, Phillips 66 announced plans to shut

its large Los Angeles-area oil refinery in the fourth quarter of

2025.

Last month, Valero Energy ( VLO ) announced plans to cease

operations at its San Francisco-area oil refinery next year.