California Struggles With High Gas Prices
By CLIFFORD KRAUSS - The NY Times
Drivers in Southern California awoke Friday to find that their gasoline prices had spiked by nearly 20 cents a gallon overnight as a result of fuel shortages caused by a series of refinery disruptions in recent weeks.
Some gas stations around the Los Angeles area were forced to shut off their pumps because of rationing by suppliers, and they displayed makeshift signs explaining that the shortages were not their fault. Drivers formed long lines at stations that did have gas, with some stations raising prices to more than $5 a gallon for regular gasoline.
“What are they doing to us?” said Marilyn Tucker, a FedEx employee, as she stopped pumping at a central Los Angeles gas station at $37, well before the tank of her sedan was full. “It’s just ridiculous.”
Prices had been rising for several days, making California the most expensive state for gasoline. On Friday, Californians paid an average of $4.49 a gallon for regular — 70 cents above the national average. Nationally, gas prices have risen less than half a penny a gallon over the last week, with prices now easing in many states.
Supplies of refined petroleum products on the West Coast are now at their lowest levels since 2008, while national inventories are about normal.
The immediate cause of the California price rise was a power failure at Exxon Mobil’s Torrance, Calif., refinery on Monday that shut down some production units at the 150,000-barrel-a-day facility. The company on Friday said the refinery had resumed normal operations. Supplies on the West Coast had already been tight because of an Aug. 6 fire at Chevron’s 245,000-barrel-a-day Richmond, Calif., refinery, which has still not been restored to full production.
California typically has substantially higher gasoline prices than most of the country because of its tough environmental regulations and high taxes. Gasoline supplies are traditionally tight this time of year as refiners do maintenance work to switch from summer to fall gasoline blends mandated by the California pollution-reduction regulations. But this year, energy experts say, the local gasoline market is particularly chaotic because of the refinery shutdowns.
Refining experts said the rationing and exceedingly high prices would probably last a couple of weeks at the most. Tom Kloza, chief oil analyst at the Oil Price Information Service, said California customers might get some relief in the next few days because traders were suddenly lowering the prices of their bulk sales almost as fast as they were raising them over the last few days. He said the wholesale price for gasoline on the West Coast dropped 50 cents on Friday from a high of $4.25 a gallon.
“The prices are incredibly erratic,” Mr. Kloza said. “It’s gone from incredibly excessive pricing to just plain excessive.”
In Southern California, Costco Wholesale outlets and other unbranded stations were particularly hard hit by the shortages because refineries normally supply their branded customers first because they pay a higher premium for locking in guaranteed supplies. Valero Energy, along with other refiners, temporarily halted spot sales of gasoline to some of its California customers.
“California requires a specific blend of gasoline that only the refineries on the West Coast make,” said Bill Day, a spokesman for Valero. “So when there is a shortage of that blend, you can’t just send supplies from somewhere else.”
Gasoline prices largely depend on the price of crude oil. Global oil prices have eased somewhat since the beginning of the year, despite turmoil in the Middle East and sanctions on Iran. The easing is attributed to slowing economic activity around the world and increased supplies coming from several countries including Iraq, Libya, Saudi Arabia and the United States.
Across the country, gas prices remain high. The $3.79 average price for a gallon of regular is 39 cents higher than it was a year ago, although the price has come down 3 cents over the last month.
Nationally, Mr. Kloza said, the price of a regular gallon of gasoline should ease to about $3.50 between now and December, which would put prices fairly similar to a year ago.
High gasoline prices have frequently been a political issue, but President Obama may get a break this year because several swing states like Florida, Ohio, Virginia, North Carolina, Nevada and New Hampshire have gasoline prices that are relatively low compared with the national average.
On Friday, in central Los Angeles, motorists expressed a combination of frustration, resignation and anger.
“I’m not happy about it,” said Michael Eisenhower, 52, a television costume designer, as he stared at the digits rising to nearly $40 to fill up his sport utility vehicle. He stopped short of topping off as he complained that his wages were not rising as fast as the price of gas.
“I’ve been putting in a reasonable amount of gas, enough for two days or so,” he said. “It’s my way of budgeting what I have to work with each week.”
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Originally Posted by Hal-9000
and that 3x price rape all goes to your government so they can piss it away on nothing and still be ridiculous in the red on their spending habits
