Why High Gas Prices in California Don't Compute

by Robert Gisel


Hoping to find some logic in the high price of gasoline in California, the 2nd or 3rd highest depending on who you ask, it just doesn't compute.

I had thought it had to do with the commodity price of the barrel of oil. In this case the barrels are coming from California and don't specifically have to do with suspension of exports from Libya or the whims of the Saudis.

Average gas price in California is $4.21, though, that figure may be already too low against the rapid rise currently happening, plus roughly 10 cents a week. In Hawaii it is $4.52 and it is $4.13 in Anchorage, Alaska. These are the three highest state prices. I can possibly understand the price in Hawaii, being across the ocean. California and Alaska are oil producing states and have their own gas refineries. Time to go back to logics class.

An ARCO owner said to me this was due to the high taxes, making up much of the cost. Per wiki.answers.com in California "Tax is 69.9 cents per gallon. Of that amount 18.4 cents is Federal Tax." Without that tax it is $3.51 per gallon. The lowest state prices with tax included are evidently Wyoming, Colorado and Montana, $3.52 to $3.61. I guess they must charge more in California because movie stars can afford it.

Per DemocraticUnderground.com "California gasoline production tops 1 million barrels a day". I don't know where they got their figure. Seems low. California caRFG ( California Reformulated Gasoline to reduce emissions) production, per a Berkley study of some years ago, indicated 15 billion gallons produced was commensurate with 14.8 billion gallons consumed (omitted time), where production was close to peak capacity and the added cost of 30 cents per gallon over the national average was due to the increased cost of producing and storing caRFG, and that Market Power, i.e., opportunity for price gouging, probably doesn't exist. One can wonder who paid for that study circa 2004.

Consumers have to get where they need to go so short term price spikes don't significantly curtail purchases. Opportunities for spurts of high profits are well covered by the PR lines in place by the oil companies. When the public are willing to pay there is not much to contest.

The California Reformulated Gasoline program implemented in January of 1992 on demand of the Air Resources Board is said to have produced, by 2003, the equivalent of the reduction of 3.5 million cars from California's roads. A large increase of the number of hybrid, hybrid EV and battery EV vehicles would have the same effect and probably be more economically feasible for the consumer dishing out money at the pump.

In other words, if the price at the pump concerns you then bypass this altogether with an Electric Vehicle. Free market being what it is and government intervention being what it is it is a good idea to take the initiative and seriously consider this alternative.

Price of Gas in Alaska

by Robert L. Gisel


The Juneau Empire just ran an article on the price of gas at the pump In Juneau, Alaska, fluctuations of, prompting me to reply with this comment:

This time last year when I flew from LA to Anchorage the only thing cheaper in Alaska was the gas. No joke. At $3.29 a gallon in LA it was, lowest in town, $2.99 a gallon, went up to $3.09 (lowest station) in the two weeks I was there. Still it was over $3.30 in LA. I was told that was because it was the gas refined in Alaska.

"Milsec" above logged these prices from Juneau:

6/05/08 $4.059 gal $122.54 Barrel
6/11/08 $4.159 gal $128.86 Barrel
6/23/08 $4.419 gal $140.21 Barrel
7/04/08 $4.499 gal $145.29 Barrel
7/09/08 $4.499 gal $145.08 Barrel
7/19/08 $4.649 gal $128.88 Barrel
8/15/08 $4.599 gal $113.77 Barrel

In Sacramento, north side, the price has been over $4.00 a gallon since June. Mid July or so it finally hit at least $4.43, lowest stations, Kwick Stop and Exon AM/PM, and as high as $4.69 even $4.75 at Chevrons and Shell Stations. This month it finally came back under $4.00. Today the price has posted at $3.72, lowest, to 10 to 20 cents higher in other stations. All of these prices were higher yet in South Sacramento.

Daily the gas stations here are given a wholesale price figure and daily the price is raised or lowered, or not, according to the competitiveness and goodwill of the station manager.

So why not gas from the refineries in Alaska into Juneau instead of Saudi gas from Seattle? I highly doubt that it is Alaska gas from Seattle. I'd think you'd have a better chance to get cheaper gas where you produce it, even in California which refines gas and still runs among the highest prices in the nation, at least the south 48. Talk to your own, Governor or whoever will listen, as very possibly the cheapest (and home grown) gas available to Alaska is refined in Alaska.

There's always the alternate route: LimitlessEnergy.blogspot.com. Yank your drive train and put in an electric engine.

Let's face it, price at the pump corresponds to the daily spot price of crude oil and that is speculated and manipulated for profit making purposes. The only guarantee of no worry of the price of gas at the pump is don't pump any. There are alternatives, doable and affordable, that make much more sense right now.