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BLOOMBERG: California Gas Stations Begin to Shut on Record-High Prices

BLOOMBERG: California Gas Stations Begin to Shut on Record-High Prices

By Lynn Doan and Joshua Falk
Oct 4, 2012 10:38 AM PT

Gasoline station owners in the Los Angeles area including Costco Wholesale Corp. (COST) are beginning to shut pumps because of supply shortages that have driven wholesale fuel prices to record highs.

Costco’s outlet in Simi Valley, 40 miles (64 kilometers) northwest of Los Angeles, ran out of regular gasoline yesterday and was selling premium fuel at the price of regular, Jeff Cole, Costco’s vice president of gasoline, said by telephone. The company hasn’t been able to find enough unbranded summer-grade gasoline to keep its stations supplied, he said.

The gasoline shortage “feels like a hurricane to me, but it’s the West Coast,” Cole said yesterday. “We’re obviously extremely disheartened that we are unable to do this, and we’re pulling fuel from all corners of California to fix this.”

Spot, or wholesale, gasoline in Los Angeles climbed 30 cents to $1.45 a gallon over gasoline futures traded on the New York Mercantile Exchange, data compiled by Bloomberg show. That’s the highest level for the fuel since at least November 2007, when Bloomberg began publishing prices there. The premium has surged $1 this week. On an outright basis, the fuel jumped to $4.3396 a gallon.

Read more: http://www.bloomberg.com/news/2012-10-03/california-gas-stat...

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The Sacramento Bee

had an article yesterday saying that the number of Sacramento-area households without a car rose 25%.

http://www.sacbee.com/2012/10/01/4869083/thousands-have-lost...

When a true genius appears in the world, you may know him by this sign: that the dunces are all in confederacy against him. ~J. Swift

Reason for Cost increase and shortage

In California, there are additional regulations on the quality/grade of the fuel that we use. The special blend of CA fuel is known as CARBOB, and is not produced in nearly the amounts as the normal gasoline that is used in most of the country.

A fire at the Richmond CA refinery back in August has impacted supply of this special oil blend in California, and the plant still isn't back to running at 100 percent. Now a few other oil refineries are having issues as well, and there are only 12 or 13 refineries that produce the CA blend of gasoline.

Overall US supply may be fine but CA gets squeezed because of a lack of production. People like to point the finer at big oil saying they are just fleecing us for profit, but really CA legislators have created a supply issue with their regulation.

peace + liberty = prosperity

Another fine example of "Economics In One Lesson."

I guess the California lawmakers never read any Henry Hazlitt.

lol @ "California lawmakers"

elected CA "officials" don't make the laws. It's people like my brother, a medium level CA government worker, and the lobbyists that write the laws in this sorry state. The "officials" sit in their crystal palace offices laughing at the populace while they collect their latest corruption money.

Yes, well, that's what I mean. I'm not necessarily talking

about those that hold the titles, I'm talking about the ones who put pen to paper.

Same holds for Congress.

I doubt seriously any of them do the actual work they are supposed to be doing.

And if they did do it, we'd either be better off because they'd be able to be held accountable more, or because they would be unable to accomplish anything.

Our liberty is only safe when Congress is not in session.

Sounds fishy

.

allegory - ˈalɪg(ə)ri/ - noun - 1. a story, poem, or picture which can be interpreted to reveal a hidden meaning, typically a moral or political one.

Why though?

We here in the USA have an excess of fuel, so much so that we even export a lot of the oil drilled in this country. Perhaps speculators anticipate a break out of a major conflict in the middle east? After hearing that Turkey was shelled by "Syria" war sounds like it is just around the corner, the only thing holding it up is the election.

“When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic.” – Dresden James