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Wholesale Gasoline Shortage In California Causes Gas Stations To Shut Down: Hoarding Next?

Submitted by Tyler Durden on 10/04/2012 14:54 -0400

Crude
Exxon
NYMEX

"The squeeze is on, and people are doing desperate things," is how one independent described the situation in California. As Bloomberg reports, a shortage of supply along with drastically higher wholesale prices of gasoline has caused 'mom-and-pop' gas stations to close down as their margins are destroyed. Even larger firms, such as CostCo, are closing sites due to the shortages as Los Angeles and San Francisco gas prices jump 30-45c in a few days.

As one owner noted: "I can get gas, but it’s going to cost me $4.90 a gallon, and I can’t sell it here for $5," and another added that "we’re going to start shutting pumps Friday, as gas is costing me almost $4.75 a gallon with taxes. There’s no sense in staying open. The profit margins are so low it’s not worth it."

The problem is likely a short-term one according to some as the temporary shutdown of local refineries (after Chevron's Richmond refinery fire) and maintenance is completed but it is clear that even a short-term blip in wholesale prices (whether driven by local supply or global geopolitics) causes pain as it would appear we are close to 'inelastic' levels of demand.

read more http://www.zerohedge.com/news/2012-10-04/wholesale-gasoline-...




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The problem here is that there are laws that are causing this

mess and perpetuating it.

If California simply repealed it's laws about how much stations can hike prices, they would be able to raise them to maintain their margins. Gas could flow, though it would certainly be more expensive.

Now, instead, it doesn't flow at all.

Can't be had at ANY price.

One doesn't need to agree with Austrian Economics, but if you don't respect it, it will bite you in the ass every time.