gas prices spiking in california
10-04-12, 10:05 PM
#1
Lexus Fanatic
Thread Starter
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gas prices spiking in california
Skyrocketing gasoline prices caused some local service stations to shut off their pumps Thursday while others shocked customers with overnight price increases of 30 cents or more.
California's fuel industry isn't running out of gasoline — supplies are only 2.5% lower than this time last year — but recent refinery and pipeline mishaps sent wholesale prices to all-time highs this week. As a result, some station owners weren't buying fuel for fear they couldn't sell it. Those who did buy simply kicked prices higher and bet customers would understand.
"If this keeps up, I'll be looking at $5-a-gallon gas by next Thursday," said Ali Mazarei, who owns an Arco station in Riverside County. On Thursday, Mazarei was charging $4.52 for a gallon of regular gasoline, up from $4.27 on Wednesday and $4.21 on Tuesday.
"I really don't have any choice here, and I won't be making money at $4.52 a gallon," he said.
Some fuel stops had already crossed the $5 threshold.
On Thursday afternoon, the Low-P station in Calabasas was selling regular gasoline for $5.69 a gallon in cash, or $5.79 for credit card purchases. In addition to the high prices, the pumps displayed hand-lettered signs reading: "We are sorry, it is not our fault."
The station, whose name is short for "low price," is usually full of drivers attracted by the high-profile location at Calabasas Road and Parkway Calabasas, right off the 101 Freeway. But customers thinned out as prices soared.
Low-P has to pay more "because we're an independent gas station" that lacks the buying power of its big-brand counterparts, said owner John Rabi, who paid $40,000 for a 9,000-gallon load that day, up from $32,000 a few days before.
Some drivers didn't pick up on the price right away.
"Holy shoot! I didn't notice that earlier," Aaron Belcher, 38, said as he ripped his Visa card from the reader. "This is ridiculous."
Tiffany Lemme, who spent $50.29 on less than nine gallons, said she was shocked on a recent trip to Miami when she paid $5.30 a gallon.
"I thought that was crazy, but this is insane," the 31-year-old Woodland Hills resident said.
Many stations closed their pumps as soon as they ran out of the fuel they'd bought more cheaply. Some owners worried that if they paid the current wholesale price, they would be stuck selling that gas at a loss when prices fell.
Several Costco gas stations, including those in Marina del Rey, Tustin and Inglewood, closed Thursday. A manager in Inglewood said the only nearby Costco outlets that hadn't run out of gas were in Hawthorne and Torrance.
A sign at one Costco apologized: "We do not know when we will be resupplied."
On Thursday, the wholesale price of California gasoline hit a record-setting $4.39 a gallon, said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. The wholesale price surpassed even the retail price: California filling stations were charging $4.315 on average Thursday, according to AAA's daily survey. That was up more than 8 cents from Wednesday.
Analysts attributed the increase to mishaps that have befallen some of the state's 14 refineries, which operate with little margin for error because few facilities outside California make the state's cleaner-burning gasoline.
"Most recently there has been a problem with an oil pipeline that supplies gasoline for Tesoro, Valero and Shell stations," said Patrick DeHaan, senior petroleum analyst for GasBuddy.com, a price-tracking website. A power outage Monday forced the temporary shutdown of Exxon Mobil's Torrance refinery, DeHaan said. The August fire at Chevron Corp.'s Richmond refinery was also cited.
Kloza added that there was an element of panic in the run-up in wholesale prices, with buyers fearing more refinery problems.
"There is a sense out there that this might not just be the typical run of bad timing and bad luck in terms of refinery outages," Kloza said. "People are beginning to wonder whether something else might be involved. Has the heat been a factor? Is the electrical grid holding up? Are these refineries just a little too old?"
How long will the high prices last? That depends on whether more problems occur, fuel price expert Bob van der Valk said.
A form of relief might come if the state's refineries are allowed to switch to the cheaper winter blend of gasoline in the next few days rather than having to wait until the end of October, he said.
"The California Energy Commission received a request for that from the California Independent Oil Marketers Assn.," Van der Valk said. "However, Southern California is currently enduring a heat wave, and air quality will be given primary consideration before any final decision is made."
The summer blend is designed to reduce evaporation of pollutants during warm weather.
http://www.latimes.com/business/la-f...,2326954.story
California's fuel industry isn't running out of gasoline — supplies are only 2.5% lower than this time last year — but recent refinery and pipeline mishaps sent wholesale prices to all-time highs this week. As a result, some station owners weren't buying fuel for fear they couldn't sell it. Those who did buy simply kicked prices higher and bet customers would understand.
"If this keeps up, I'll be looking at $5-a-gallon gas by next Thursday," said Ali Mazarei, who owns an Arco station in Riverside County. On Thursday, Mazarei was charging $4.52 for a gallon of regular gasoline, up from $4.27 on Wednesday and $4.21 on Tuesday.
"I really don't have any choice here, and I won't be making money at $4.52 a gallon," he said.
Some fuel stops had already crossed the $5 threshold.
On Thursday afternoon, the Low-P station in Calabasas was selling regular gasoline for $5.69 a gallon in cash, or $5.79 for credit card purchases. In addition to the high prices, the pumps displayed hand-lettered signs reading: "We are sorry, it is not our fault."
The station, whose name is short for "low price," is usually full of drivers attracted by the high-profile location at Calabasas Road and Parkway Calabasas, right off the 101 Freeway. But customers thinned out as prices soared.
Low-P has to pay more "because we're an independent gas station" that lacks the buying power of its big-brand counterparts, said owner John Rabi, who paid $40,000 for a 9,000-gallon load that day, up from $32,000 a few days before.
Some drivers didn't pick up on the price right away.
"Holy shoot! I didn't notice that earlier," Aaron Belcher, 38, said as he ripped his Visa card from the reader. "This is ridiculous."
Tiffany Lemme, who spent $50.29 on less than nine gallons, said she was shocked on a recent trip to Miami when she paid $5.30 a gallon.
"I thought that was crazy, but this is insane," the 31-year-old Woodland Hills resident said.
Many stations closed their pumps as soon as they ran out of the fuel they'd bought more cheaply. Some owners worried that if they paid the current wholesale price, they would be stuck selling that gas at a loss when prices fell.
Several Costco gas stations, including those in Marina del Rey, Tustin and Inglewood, closed Thursday. A manager in Inglewood said the only nearby Costco outlets that hadn't run out of gas were in Hawthorne and Torrance.
A sign at one Costco apologized: "We do not know when we will be resupplied."
On Thursday, the wholesale price of California gasoline hit a record-setting $4.39 a gallon, said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. The wholesale price surpassed even the retail price: California filling stations were charging $4.315 on average Thursday, according to AAA's daily survey. That was up more than 8 cents from Wednesday.
Analysts attributed the increase to mishaps that have befallen some of the state's 14 refineries, which operate with little margin for error because few facilities outside California make the state's cleaner-burning gasoline.
"Most recently there has been a problem with an oil pipeline that supplies gasoline for Tesoro, Valero and Shell stations," said Patrick DeHaan, senior petroleum analyst for GasBuddy.com, a price-tracking website. A power outage Monday forced the temporary shutdown of Exxon Mobil's Torrance refinery, DeHaan said. The August fire at Chevron Corp.'s Richmond refinery was also cited.
Kloza added that there was an element of panic in the run-up in wholesale prices, with buyers fearing more refinery problems.
"There is a sense out there that this might not just be the typical run of bad timing and bad luck in terms of refinery outages," Kloza said. "People are beginning to wonder whether something else might be involved. Has the heat been a factor? Is the electrical grid holding up? Are these refineries just a little too old?"
How long will the high prices last? That depends on whether more problems occur, fuel price expert Bob van der Valk said.
A form of relief might come if the state's refineries are allowed to switch to the cheaper winter blend of gasoline in the next few days rather than having to wait until the end of October, he said.
"The California Energy Commission received a request for that from the California Independent Oil Marketers Assn.," Van der Valk said. "However, Southern California is currently enduring a heat wave, and air quality will be given primary consideration before any final decision is made."
The summer blend is designed to reduce evaporation of pollutants during warm weather.
http://www.latimes.com/business/la-f...,2326954.story
10-05-12, 12:03 AM
#7
Lexus Test Driver
This is how it is... the oil companies have set it up to raise prices at the whim of any rumor but not over actual dilemmas. The reality is, there has never been an actual shortage of gas and NONE of the reasons they state could ever effect gas flow to our stations (power outage in OC is the latest sob story). Another excuse is they are switching over to the winter formula. But if one has a memory, they'll recall oil companies stated prices go up when they switch to more expensive SUMMER formulas, NOT winter. If what they say is true, prices should be falling now, not going up. So it's more BS again, has been for ten years now, and our lovely political leaders have done absolutely NOTHING to help us captive citizens while we get taken advantage of, raped, and treated like fools. Sorry, but I'm sick and tired of being lied to and those out there that are supposed to protect us have done jack squat. Tomorrow, my neighbor will sneeze and prices will go up another 50 cents. In the meantime, all the gas shipped to the pumps yesterday at the lower price will cost more to the consumer tomorrow and the oil companies will increase their profits even more. Yep, that's fair alright.
Now I know someone is going to come on here defending oil companies and politicians, but I've lived long enough to see the patterns of what they tell us. Nothing they've said has ever panned out to be an actual supply problem and their "stories" have contradicted themselves two dozen times in the last twenty years. Do you really like being fed bullcrap? You have to look at what you are told, at history, at the patterns, and it becomes obvious we are treated like dog****. Yes Mr. Obama, everything is juuuuust fine and we certainly are better off today paying $4.80/gal than we were four years ago. Thanks for going to bat for us while we cancel our weekend plans.
Now I know someone is going to come on here defending oil companies and politicians, but I've lived long enough to see the patterns of what they tell us. Nothing they've said has ever panned out to be an actual supply problem and their "stories" have contradicted themselves two dozen times in the last twenty years. Do you really like being fed bullcrap? You have to look at what you are told, at history, at the patterns, and it becomes obvious we are treated like dog****. Yes Mr. Obama, everything is juuuuust fine and we certainly are better off today paying $4.80/gal than we were four years ago. Thanks for going to bat for us while we cancel our weekend plans.
Last edited by Fizzboy7; 10-05-12 at 12:09 AM.
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10-05-12, 04:55 AM
#8
Lexus Champion
This is how it is... the oil companies have set it up to raise prices at the whim of any rumor but not over actual dilemmas. The reality is, there has never been an actual shortage of gas and NONE of the reasons they state could ever effect gas flow to our stations (power outage in OC is the latest sob story). Another excuse is they are switching over to the winter formula. But if one has a memory, they'll recall oil companies stated prices go up when they switch to more expensive SUMMER formulas, NOT winter. If what they say is true, prices should be falling now, not going up. So it's more BS again, has been for ten years now, and our lovely political leaders have done absolutely NOTHING to help us captive citizens while we get taken advantage of, raped, and treated like fools. Sorry, but I'm sick and tired of being lied to and those out there that are supposed to protect us have done jack squat. Tomorrow, my neighbor will sneeze and prices will go up another 50 cents. In the meantime, all the gas shipped to the pumps yesterday at the lower price will cost more to the consumer tomorrow and the oil companies will increase their profits even more. Yep, that's fair alright.
Now I know someone is going to come on here defending oil companies and politicians, but I've lived long enough to see the patterns of what they tell us. Nothing they've said has ever panned out to be an actual supply problem and their "stories" have contradicted themselves two dozen times in the last twenty years. Do you really like being fed bullcrap? You have to look at what you are told, at history, at the patterns, and it becomes obvious we are treated like dog****. Yes Mr. Obama, everything is juuuuust fine and we certainly are better off today paying $4.80/gal than we were four years ago. Thanks for going to bat for us while we cancel our weekend plans.
Now I know someone is going to come on here defending oil companies and politicians, but I've lived long enough to see the patterns of what they tell us. Nothing they've said has ever panned out to be an actual supply problem and their "stories" have contradicted themselves two dozen times in the last twenty years. Do you really like being fed bullcrap? You have to look at what you are told, at history, at the patterns, and it becomes obvious we are treated like dog****. Yes Mr. Obama, everything is juuuuust fine and we certainly are better off today paying $4.80/gal than we were four years ago. Thanks for going to bat for us while we cancel our weekend plans.
IMO, oil companies are the evil empire, withholding tech to squeeze more profits....and yes Obama DOES want higher gas prices.
Last edited by bagwell; 10-05-12 at 04:59 AM.
10-05-12, 05:20 AM
#9
This is how it is... the oil companies have set it up to raise prices at the whim of any rumor but not over actual dilemmas. The reality is, there has never been an actual shortage of gas and NONE of the reasons they state could ever effect gas flow to our stations (power outage in OC is the latest sob story). Another excuse is they are switching over to the winter formula. But if one has a memory, they'll recall oil companies stated prices go up when they switch to more expensive SUMMER formulas, NOT winter. If what they say is true, prices should be falling now, not going up. So it's more BS again, has been for ten years now, and our lovely political leaders have done absolutely NOTHING to help us captive citizens while we get taken advantage of, raped, and treated like fools. Sorry, but I'm sick and tired of being lied to and those out there that are supposed to protect us have done jack squat. Tomorrow, my neighbor will sneeze and prices will go up another 50 cents. In the meantime, all the gas shipped to the pumps yesterday at the lower price will cost more to the consumer tomorrow and the oil companies will increase their profits even more. Yep, that's fair alright.
Now I know someone is going to come on here defending oil companies and politicians, but I've lived long enough to see the patterns of what they tell us. Nothing they've said has ever panned out to be an actual supply problem and their "stories" have contradicted themselves two dozen times in the last twenty years. Do you really like being fed bullcrap? You have to look at what you are told, at history, at the patterns, and it becomes obvious we are treated like dog****. Yes Mr. Obama, everything is juuuuust fine and we certainly are better off today paying $4.80/gal than we were four years ago. Thanks for going to bat for us while we cancel our weekend plans.
Now I know someone is going to come on here defending oil companies and politicians, but I've lived long enough to see the patterns of what they tell us. Nothing they've said has ever panned out to be an actual supply problem and their "stories" have contradicted themselves two dozen times in the last twenty years. Do you really like being fed bullcrap? You have to look at what you are told, at history, at the patterns, and it becomes obvious we are treated like dog****. Yes Mr. Obama, everything is juuuuust fine and we certainly are better off today paying $4.80/gal than we were four years ago. Thanks for going to bat for us while we cancel our weekend plans.
Look at your own state govt before blaming oil companies. Because there is a reason why this is only a California problem.
Last edited by 4TehNguyen; 10-05-12 at 05:28 AM.
10-05-12, 05:30 AM
#10
you know whats funny is this is not happening anywhere else. Why just in California? Your state has mandated certain fuel blends that NO OTHER state uses. Couple that with some shutdowns and turnarounds at local facilities (bad timing), guess whats going to happen - a supply disruption. They are even trying to get the state govt to give a waiver to accept winter blend fuel that normally has to be produced at the end of October. We have a huge surplus of gasoline, we export gasoline, refineries around the country are shutting down, our fuel demand has fallen to 1997 levels. Other states are easily able to fufill a supply gap to California. Wait, sorry we cant because of Calis byzantine fuel blend laws that essentially prevent out of state gas from being sold in the state, because no one else makes that special California blend. This special blend is another reason why your gas is so much more expensive than gas in the rest of the country
Look at your own state govt before blaming oil companies. Because there is a reason why this is only a California problem.
Look at your own state govt before blaming oil companies. Because there is a reason why this is only a California problem.
10-05-12, 05:40 AM
#11
http://www.consumerenergyreport.com/...ng/#more-10061
http://finapps.forbes.com/finapps/js...s.jsp?tkr=AAPL
10-05-12, 05:53 AM
#12
Lexus Champion
you mean the outrageous 13.6% margins? Apple makes almost 40% margin and higher overall profits, but its ok they get a free pass. Brewers make 20%, outrageous!
http://www.consumerenergyreport.com/...ng/#more-10061
http://finapps.forbes.com/finapps/js...s.jsp?tkr=AAPL
http://www.consumerenergyreport.com/...ng/#more-10061
http://finapps.forbes.com/finapps/js...s.jsp?tkr=AAPL
10-05-12, 06:02 AM
#13
Back around 2004-2005, when gas went from $1.50 to $3.50, you seriously believe oil companies profit margin stayed the same?
10-05-12, 06:09 AM
#14
Super Moderator
And if it is, I must work for Satan himself. My company provides a necessary service to small businesses, and our margins are over 80%. This is a service that the owners could do themselves, but saving them the time, trouble, and risk of error is worth our modest cost, and despite the high margins, we are still one of the least expensive options around, because we keep our own costs low. Though we don't operate on a global scale, our business is similar to the oil companies in that the first customer costs many thousands (more like hundreds of millions in their case) of times what we charge them, and we only achieve profitability through massive scale.
If you're not willing to make the investment to drill, transport and refine oil so you can run your car, is 13.6% really so unreasonable a surcharge for those that DO make that investment on your behalf?
Last edited by geko29; 10-05-12 at 06:22 AM.
10-05-12, 06:15 AM
#15
So then if oil companies are operating on 13.6% profit margin, would you explain to me how were they able to make money when gas was sold for $1.50 a gallon?
Back around 2004-2005, when gas went from $1.50 to $3.50, you seriously believe oil companies profit margin stayed the same?
Back around 2004-2005, when gas went from $1.50 to $3.50, you seriously believe oil companies profit margin stayed the same?
http://articles.nydailynews.com/2011...l-oil-revenues
http://www.forbes.com/2011/05/10/oil...-earnings.html
Oh look the govt makes even more off gas than the oil companies. No outrage there:
At the gas tank integrated oil companies make about 7 cents per gallon. Meanwhile, the government extracts more than 48 cents, on average, per gallon. That's right: Uncle Sam takes nearly seven times more out of drivers' wallets via taxation than "Big Oil."
Last edited by 4TehNguyen; 10-05-12 at 06:19 AM.