Gas Prices Are Really Up in California
While gas prices have risen in most of the country, they’re really up in California. We’re talking 60 cents a gallon up, and things could get even worse.
Crude oil is still just $49 per barrel, and refined gasoline is still the cheapest it’s been in years. But a range of factors are driving up the price we pay at the pump throughout the country.
For starters, this is the time of year when refineries go through their winter maintenance cycle, as they gear up to produce the summer gasoline formulations. While maintenance takes place, production drops, and gas prices rise a bit. This is perfectly normal.
What’s not normal are accidents and work stoppages due to labor disputes. Right now, we’ve got these things happening, just as the routine maintenance period kicks in.
Steelworkers have gone on strike at 12 refineries across the country. This alone has cut supply by about 20%, according to the experts. But things got much worse last week when there was an explosion at the Exxon Mobil refinery in Torrance, California.
This is particularly bad, since California has its own gasoline economy that’s separate from this rest of the country’s. For one thing, California requires a special blend of gasoline that costs more to produce. But even if the state government would relent, and allow 49-state gas to be used on a temporary basis, there’s really no way to get a lot of it into the state fast.
California has long been one of the country’s biggest oil producing states. So, it really didn’t make much sense to build pipeline systems to connect the state to the country east of the Rockies. This means that California is oil and gasoline-isolated from the rest of the country.
The nationwide supply restrictions have made things bad enough, but the Torrance explosion added to this tightening of supply, and driven gas prices up sharply for Golden State motorists.
Not everyone is buying this explanation, however. A group called Consumer Watchdog is crying foul, and accusing the industry of price fixing.
In a statement Consumer Watchdog President Jamie Court said “There is just no good explanation for why consumers are paying this much at the pump.” The group is calling for an investigation.
It’s not hard to see why people in California are upset: just last week, the price of regular unleaded rose from $2.98 per gallon to $3.23. That’s a 25 cent a gallon rise in just one week. Prices are up by 60 cents per gallon since January 30. At least the weather in California is still nice.
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