Monday, January 18, 2016 – 11:30 a.m.
Last Modified: Monday, January 18, 2016 – 05:00 p.m.
As crude oil prices hit multi-year lows, California continues to get hosed by gasoline refiners.
We continue to hear all the usual excuses for the gouging. The refinery blew up, unplanned refinery maintenance, we’re short on oil inventory, etc….
Crude oil continues its downhill trajectory. One that’s likely to continue, with Iran preparing to dump 500,000 barrels of crude onto the market daily.
Regardless of the circumstances, oil companies continue to use California as their profit support mechanism.
The California Energy Commission’s latest refinery activity report shows gasoline inventories building, with healthy supply of crude inventory on hand.
In other words, oil’s getting cheaper, supply is plentiful, and blending components are readily available. Yet pump prices remain high.
As as matter of fact they’re outrageously high.
According to pump price tracker website GasBuddy.com, California has the highest average gasoline price in the country at $2.772 per gallon.
Neighboring state’s Nevada ($2.424), Arizona ($1.912) and Oregon ($2.187) are significantly lower. The lowest in the nation is Oklahoma at $1.55 per gallon.
Well get ready to brace for a new excuse to gouge.
Refiners are already pimping the story about the conversion to the environmentally-friendly and more expensive “summer blend” gasoline in the spring.
The only difference from prior years?
The cost is purportedly going to be higher.
Summer blend has been routinely 25 to 30 cents per gallon more than winter in past years. Now the emerging story line pegs it at 50 cents.
Today, California gas prices should be significantly lower than where they actually are. But it would appear oil companies are looking at any way possible to keep the California price at or near $3 per gallon.
That’s even if the price of oil falls below $25 per barrel. Right now the price of crude oil is $28.94 per barrel.
Crude has dropped about 75% from its near-term high, while California pump prices have fallen by just roughly a third.
Don’t hold your breath waiting for state regulators or other intervention to save the day.
In California, the governmental leadership would like to see everyone in an electric or hybrid vehicle.
The way oil companies look at the situation is that crude oil could be as low as $10 per barrel and California should still be made to pay $3 per gallon regardless.
Here are the latest output numbers:
California Energy Commission Weekly Fuels Watch Report
These numbers are based on reports from California refineries, and are subject to refinery revision and Energy Commission verification.
California Weekly Refinery Production and Stocks Levels
(Thousands of Barrels)
|CARB RFG (incl. Non-Oxygenated)||6899||6315||9.2%||6676||3.3%|
|Jet Fuel: Kerosene||1965||1885||4.2%||2113||-7%|
|CARB-Diesel (< 15ppm Sulfur)||1745||1970||-11.4%||1739||0.3%|
|Other Diesel Fuel*||586||776||-24.5%||1308||-55.2%|
|CARB RFG (incl. Non-Oxygenated)||5869||5478||7.1%||6203||-5.4%|
|Gasoline Blending Components||5766||5238||10.1%||6515||-11.5%|
|Jet Fuel: Kerosene-Naphtha||3040||2863||6.2%||3429||-11.3%|
|CARB-Diesel ( <15ppm Sulfur)||3312||2905||14%||2495||32.7%|
|Other Diesel Fuel*||1083||920||17.7%||1117||-3%|
*Other diesel fuel includes EPA diesel and high sulfur diesel.
Negative values indicate a transfer of finished production being used as an input to production for another finished product. This typically occurs with high sulfur diesel being converted to a lower sulfur fuel.
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