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California Gas Stations Shut as Oil Refiners Ration Supplies
6 years ago

Gasoline station owners in the Los Angeles area including Costco Wholesale Corp. (COST) are beginning to shut pumps as the state’s oil refiners started rationing supplies and spot prices surged to a record.

Valero Energy Corp. (VLO) stopped selling gasoline on the spot, or wholesale, market in Southern California and is allocating deliveries to customers. Exxon Mobil Corp. (XOM) is also rationing fuel to U.S. West Coast terminal customers. 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.

The gasoline shortage “feels like a hurricane to me, but it’s the West Coast,” Jeff Cole, Costco’s vice president of gasoline, said by telephone 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 gasoline in Los Angeles has surged $1 a gallon this week to a record $1.45 a gallon premium versus 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. On an outright basis, the fuel has jumped to $4.3929 a gallon.

Prices Jump

Gasoline at the pump gained 8.3 cents to $4.315 a gallon in California yesterday, according to, 53.1 cents more than the national average of $3.784. In Los Angeles the price was $4.347. Gasoline futures for November delivery on the Nymex rose 14.34 cents to settle at $2.9429 a gallon, after falling yesterday to a 10-week low. Retail price movements tend to lag behind those of futures.

“Product supply in California has tightened, especially in Southern California, due to refinery outages,” Bill Day, a Valero spokesman at the company’s headquarters in San Antonio, said by e-mail.

Exxon’s Torrance refinery is restoring operations after losing power Oct. 1. Phillips 66 (PSX) is scheduled to perform work on gasoline-making units at its two California refineries this month, two people with knowledge of the schedules said. A Chevron Corp. (CVX) pipeline that delivers crude to Northern California refineries was also shut last month due to elevated levels of chloride in the oil.

San Francisco

Spot California-blend gasoline, or Carbob, in San Francisco surged 30 cents to $1.40 a gallon over futures, also the highest level since at least 2007, at 4:03 p.m. New York time.

Low-P, a gasoline station in Calabasas, California, 30 miles west of Los Angeles, stopped selling unleaded gasoline Oct. 2 and ran out of high-octane and medium-octane fuel yesterday, John Ravi, the station’s owner, said by phone yesterday. Ravi said he posted an “Out of Gasoline” sign on each pump and took down the prices outside his shop.

“I can get gas, but it’s going to cost me $4.90 a gallon, and I can’t sell it here for $5,” Ravi said. “If you come here right now, I’ve got some diesel left. That’s all. My market is open, but no gas.”

“We’re going to start shutting pumps Friday,” Sam Krikorian, owner of Quality Auto Repair in North Hollywood, said by phone yesterday. “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.”


6 years ago

yep. 20 cent jump overnight!

California Gas
6 years ago

Want to give the Obama campaign even more heartburn than it has now?  How about putting California in play?

Seems farfetched, but then people outside of California might not have noticed that gasoline pump prices jumped as much as 30 cents a gallon yesterday.  That’s how much pump prices jumped between lunch and late afternoon here on the central coast; the figure is lower in the major metropolitan areas apparently.  It is not inconceivable that there could be old-fashioned shortages and gas lines by the end of the month.  Some stations are shutting down or limiting sales already.  Paging Jimmy Carter!

The sharp price spike is attributed to tight refinery capacity problems in the state (as a couple of refineries are offline), which is true, but not exhaustive, as Churchill once explained in a different context.  As I explained in “Bureaucratic Gas” in The Weekly Standard a few months ago, California has its own special blend of gasoline for environmental reasons that are now largely obsolete.  This means that California can’t use the gasoline blends sold in Oregon, Nevada, or Arizona, which means that a refinery shortage here can’t be remedied by the usual means of bringing in more supply from somewhere else.

But President Obama could order the EPA to waive the gasoline regulations, and allow out-of-state gasoline to be transported and sold in California, delivering at least 10 to 20 cents a gallon of price relief, and perhaps much more.  Oh, that’s right: Obama wants higher gasoline prices, so don’t hold your breath.  (Note: After Hurricane Katrina, the Bush administration waived the EPA’s boutique gasoline regulations to assure adequate supplies and stable prices while the Gulf Coast refineries got back up and running.)

Memo to GOP SuperPACs: why not place a few spots on TV in California telling people to “Call the White House: Tell President Obama to give us relief at the pump!”

By the way, I keep hoping the Left will say that high gas prices are an oil company conspiracy to hurt Obama’s campaign.  After all, Obama singled out ExxonMobil for attack in his debate—the first time I can remember a presidential candidate singling out a specific corporation for abuse ever.  I guess MSNBC is still in a funk; Chris Matthews is still wandering around saying “Where did Obama misplace his knife?!?”  Come on guys, this ought to be easy.

JOHN adds: Here is another photo, sent by a reader, taken at a suburban California location:

One wonders: what would it take for Californians to try to escape from the current hopelessness by voting for change?

Calif. gas prices hit $4.67, another record
6 years ago

SANTA ANA, Calif. — Feeling the pain of California's record gasoline prices, Maria Harrison pumped just enough fuel Monday afternoon to keep her taco truck running and open for business for the rest of the day.

The $40 she spent didn't even move her gauge to the half-full mark, and she's raised the price of her tacos and sodas by 50 cents, to $2 each, to try to get by in the face of soaring gas prices.

"It's not fair,'' she says, "because they (her customers) get paid the minimum money."

"What can you do?" she adds. "I have to raise my prices. Otherwise I'm not going to make any money.''

Millions of Californians like Harrison have been making adjustments to a dismaying jump in retail gasoline prices that have set records daily even as most of the country's fuel supplies and costs have been more stable — and lower.

STORY: Location helps 10 states with lowest gas prices

Gov. Jerry Brown moved Sunday to try to stem the price spiral by ordering state regulators to allow cheaper, easier-to-produce "winter blend" gasoline to be sold in the state ahead of the normal Oct. 31 switch-over date.

The California Air Resources Board, which requires a cleaner blend in summer months to reduce air pollution, issued a statement.

"This action is necessary to address the extreme and unusual fuel supply circumstance," the statement said. It said the move was "necessary for the immediate preservation of the public peace, health and safety or general welfare."

Gas prices in California rose again overnight to set a record statewide average of $4.668 a gallon for regular, up more than 3 cents from Sunday's price, which was also a record, according to AAA's Daily Fuel Gauge Report. The price is 50 cents a gallon higher than one month ago and well beyond the $3.803 price per gallon of one year ago.

That compares with a national average of $3.818 per gallon for regular, AAA said.

In the car-dependent Los Angeles region, the average price was $4.703, higher than the statewide average.

At the Arco station here where Harrison bought her gas, regular was selling for $4.599. The station has a reputation for lower prices, and cars filled the station's lot waiting to get to a pump. Three other stations within a couple of blocks were selling regular for $4.79 and premium at $4.99.
"It is very difficult,'' said Rosa Rubalcava. "You have to find other ways of cutting back. It's hard on everybody.''
"It's terrible,'' said Jesus Velasco, who was filling his work vehicle, a Ford van pulling a trailer with steam cleaning and power-wash equipment.

He pumped $85 into the van, moving the needle to half full, and put another $45 worth into fuel tanks for his equipment, enough to half-fill the tanks and get him through the day's work.

While his employer's vehicle is fueled, Velasco is trying hard not to use his personal car.

"Now I take the bus'' to work, he said. "It's better. I save the car for my family.''

Some people have reacted with more extreme measures.

In Roseville, northeast of Sacramento, police said they are investigating the theft of 750 gallons of gasoline from pumps at a Shell station. Police Sgt. Jeff Kool said surveillance video showed two suspects defeated the station's meter controls and illegally pumped the gas into external tanks on the back of a pickup in early-morning hours over three days.

"With prices in the upper $4 a gallon, gasoline is obviously more valuable,'' Kool said. "It's a criminal opportunity.''

Oil industry analysts have blamed California's rise on a combination of factors, including the state's gasoline regulations, which set higher fuel standards than the federal government and other states use. The state's 14 refineries produce gasoline that meets the state's higher standards, but there have been unforeseen equipment problems forcing shutdowns at several refineries in the state, and fuel refined elsewhere often can't be shipped to California because it doesn't meet the higher standards, said Tupper Hull, spokesman for the Western States Petroleum Association, an industry trade group.

"Replacing lost production is more difficult here,'' Hull said. "It takes a little longer than it does in other parts of the country."

Some analysts also blame commodity traders for sending prices higher on the spot gasoline market, where many independent retailers buy their supplies, leaving them more vulnerable to price volatility than major brands that have their own refineries or lock in wholesale prices.

"Fear drove the prices incredibly high,'' said Tom Kloza, chief oil analyst with the Oil Price Information Service in New Jersey.

He said concerns that California's supplies could grow tight, based on refinery production problems and the seasonal blend change, sent prices soaring to unreasonable levels on the spot market.

Sen. Barbara Boxer, D-Calif., on Monday asked the U.S. Justice Department to investigate whether traders colluded to drive up the pump price of California gasoline. "We cannot allow market manipulation by those who would seek to profit off the pain of our families at the pump,'' she wrote to Attorney General Eric Holder.

The state's other Democratic senator, Dianne Feinstein, on Sunday called for the Federal Trade Commission to investigate whether California's fuel prices were being illegally manipulated by traders or others.

Kloza said he thinks the worst is already over on the wholesale market and that retail prices in California will fall soon. The state's move to permit the switch-over to the cheaper winter

6 years ago

Kloza said he thinks the worst is already over on the wholesale market and that retail prices in California will fall soon. The state's move to permit the switch-over to the cheaper winter blend will help, he said. He predicted the statewide average price could fall back to about $3.80 a gallon at the pump within days or weeks.

"It'll provide a little bit of relief, and together with the demand destruction that comes with $4.79 (a gallon) prices, I think we're going to get through this,'' Kloza said.

"Give it a few days,'' he said. "These gas-apocalypse highs ... I think those are history.''

6 years ago

Here’s the links to the petition for this and a link for taking pledge.


1,000 signatures is the goal.






Let’s get this petition signed. Did any more of you trying sharing them with people you know?

5 years ago

I have a petition on this link below. You could all sign in with comments and could say signing for others who would sign it if they had a chance. This is the reshaping the world one.

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