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    Thread: Refineries rationing Gas. Prices go up, Mom & Pops go down

    1. Member fixmy59bug's Avatar
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      10-04-2012 08:03 PM #1
      Discuss

      I know, Very long. Worth reading.

      Source

      Quote Originally Posted by BloombergNews
      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 AAA.com, 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.”

      ’Squeeze is On’
      “The squeeze is on, and people are doing desperate things,” Bob van der Valk, an independent petroleum industry analyst in Terry, Montana, said by e-mail yesterday. “The mom- and-pop gas stations are having to close down from either not being able to obtain gasoline from their regular distributor or cannot afford the break-even price of almost $5 per gallon.”

      Costco is working on a plan to alert its members as gasoline runs out at the company’s stores “so customers don’t have to guess where to go,” Cole said. The company will sell whatever premium gasoline it has stored for regular gasoline prices wherever supplies run out, he said.

      “Costco is a membership warehouse club with a relationship based on trust,” he said. “We’re not delivering what the members asked us to deliver, and that’s not acceptable to us. So we’re doing whatever we can to fix it.”

      Short-Term Problem
      Van der Valk called the price surge a “a short-term problem.” Wholesale costs should start falling as Exxon’s refinery returns to normal operations and other plants finish maintenance.

      The California Independent Oil Marketers Association, a Sacramento-based group that represents wholesale and retail fuel marketers, asked the state yesterday to expedite a waiver that would allow refiners to produce and sell winter-grade fuel, Jay McKeeman, a spokesman for the association, said by telephone yesterday.

      “Everybody is concerned about what might happen,” he said. “The real question is: How long is this going to last and what can the state do?”

      California’s summer-blend fuel requirements are in effect in Southern California until Oct. 31. The Reid Vapor Pressure, or RVP, limits are lifted in other areas of the state as early as Sept. 30.

      The state Air Resources Board and Energy Commission are evaluating fuel supplies and haven’t decided on the waiver, Dave Clegern, a spokesman for the air board in Sacramento, said by e- mail.

      ‘Losing Money’
      The independent gas station owners are typically the first to run out of fuel and shut their pumps when spot prices surge because they often lack long-term contracts to buy from fuel suppliers at set prices, McKeeman said.

      Jim Li said yesterday that he may stop selling gasoline at his independent station, Best Auto Care, in San Francisco. He’s charging $4.59 a gallon for the fuel, “and I’m still losing money,” he said.

      Wholesale prices are “going up so quick that there’s not even any margin to make any money at all,” he said by telephone.

      California-grade, or CARB, diesel in Los Angeles climbed 0.5 cent to 16.5 cents a gallon above heating oil futures on the Nymex. The fuel in San Francisco was unchanged at a premium of 17 cents a gallon versus futures.

      Jet fuel in Los Angeles increased 0.37 cent to a premium of 11.25 cents a gallon against futures, the highest since Sept. 19.

    2. Banned seadoo2006's Avatar
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      10-04-2012 08:20 PM #2
      Sounds like it's more crap from the wrong coast. I'll enjoy my $3.599/gallon here in good old Ohio ... enjoy your wildfires, $800,000 2 bedroom homes, and earthquakes!


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      10-04-2012 08:24 PM #3
      Quote Originally Posted by seadoo2006 View Post
      Sounds like it's more crap from the wrong coast. I'll enjoy my $3.599/gallon here in good old Ohio ... enjoy your wildfires, $800,000 2 bedroom homes, and earthquakes!

      I approve this message.

    4. 10-04-2012 08:30 PM #4
      Kind of confused over here, can someone better-educated explain this with more depth? Apparently there was some massive power outage I never heard about and now the state is running out of gasoline? Was wondering why it was almost $70 to fill up..

    5. 10-04-2012 08:32 PM #5
      Gas jumped 20c in a couple of days here. The SUV stays parked

      Quote Originally Posted by seadoo2006 View Post
      Sounds like it's more crap from the wrong coast. I'll enjoy my $3.599/gallon here in good old Ohio ... enjoy your wildfires, $800,000 2 bedroom homes, and earthquakes!

      trying too hard

    6. 10-04-2012 08:35 PM #6
      I’m so glad I left that puke awful state earlier this year.

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      10-04-2012 08:39 PM #7
      Quote Originally Posted by seadoo2006 View Post
      Sounds like it's more crap from the wrong coast. I'll enjoy my $3.599/gallon here in good old Ohio ... enjoy your wildfires, $800,000 2 bedroom homes, and earthquakes!

      Meh, you have to live in Ohio to get gas at $3.59. In Motor City world, I'm paying $3.71ish. OTOH, our football teams can't beat ya, so there's that.

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      10-04-2012 08:39 PM #8
      I got 50 cents off per gallon today. Paid $3.28 and filled up the Silverado.

    9. Banned seadoo2006's Avatar
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      10-04-2012 08:43 PM #9
      Quote Originally Posted by thegoodson View Post
      Meh, you have to live in Ohio to get gas at $3.59. In Motor City world, I'm paying $3.71ish. OTOH, our football teams can't beat ya, so there's that.
      It's okay ... I'm one of the few Ohioans that hates the suckeyes, so you're in good company. However, I am a rabid Notre Dame fan and alumnus, so, I'll have to say the wins against MSU and Big Blue were sweet this year.

    10. 10-04-2012 09:35 PM #10
      Texas does kinda suck for those of us who aren't into football, light beer, NASCAR, and ****ry music, but I do like the $3.32/gal I paid today.

    11. Member Pool Runner's Avatar
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      10-04-2012 09:47 PM #11
      Just got back home from Florida gas was $3.49 back home now in California $4.59 WTF a full dollar more.

    12. Member turbinepowered's Avatar
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      10-04-2012 09:52 PM #12
      Quote Originally Posted by initiation View Post
      Kind of confused over here, can someone better-educated explain this with more depth? Apparently there was some massive power outage I never heard about and now the state is running out of gasoline? Was wondering why it was almost $70 to fill up..
      I imagine it's a result of "no you can't burn nat gas/coal for electricity" and "no you can't build/upgrade a nuclear plant" energy policies in CA. California has struggled with rolling blackouts/brownouts for as long as I can remember.
      Quote Originally Posted by zukiphile View Post
      There is an area of a normal brain that lets the owner know the object works and needs to be left alone. Not all of us have it. It is like being colorblind.

    13. Senior Member Iroczgirl's Avatar
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      10-04-2012 11:12 PM #13
      So now why are so many mom-and-pop gas stations shutting down in Washington state? EPA stuff? I heard something about mandatory underground tank replacements.
      Lots of VW stuff|Rare Scirocco parts!
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      You're always better off with a Citroën.™

    14. Banned seadoo2006's Avatar
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      10-04-2012 11:13 PM #14
      Quote Originally Posted by Iroczgirl View Post
      So now why are so many mom-and-pop gas stations shutting down in Washington state? EPA stuff? I heard something about mandatory underground tank replacements.
      Or maybe it's the fact that they only make a cent profit on each gallon of gas sold.

    15. Member valfaw's Avatar
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      10-04-2012 11:30 PM #15
      cry me a river cali... eff you... we've been dealing with those kinds of eff'd prices here in Chicago all along for no good reason other than greed.

    16. Member Live-Wire's Avatar
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      10-04-2012 11:37 PM #16
      ??? Our gas prices just go up without any reason at all in Ontario... and we still pay more then California.

      We have abundant electrical power tho... (all the new solar, wind, the Nukes' that are finnnnnally coming back online after prolonged repairs and over-blown budgets as well as consumer demand that is dropping due to more energy efficient tech). Typically we pay New York, Ohio, and Michigan to take our surplus ... Maybe we need a direct line to Cali. Instead of paying for someone to take it we can charge thru the roof!

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      10-05-2012 12:01 AM #17
      Quote Originally Posted by turbinepowered View Post
      I imagine it's a result of "no you can't burn nat gas/coal for electricity" and "no you can't build/upgrade a nuclear plant" energy policies in CA. California has struggled with rolling blackouts/brownouts for as long as I can remember.
      Did you learn how to use facts from the debates lastnight?

      Over half of the electricity produced in California comes from natural gas.

      There's very little power from coal because it would need to be brought in from elsewhere.

      The San Onofre nuclear power plant completed an upgrade earlier this year.
      Quote Originally Posted by apizzaparty View Post
      never thought once to use my lefty for the brake. sorry in my opinion it is dumb.

    18. Senior Member AZGolf's Avatar
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      10-05-2012 12:08 AM #18
      http://www.phoenixgasprices.com/retail_price_chart.aspx

      Select San Francisco as the graph. If that's not a hockey stick, I don't know what is!

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      10-05-2012 03:05 AM #19
      Quote Originally Posted by seadoo2006 View Post
      Sounds like it's more crap from the wrong coast. I'll enjoy my $3.599/gallon here in good old Ohio ... enjoy your wildfires, $800,000 2 bedroom homes, and earthquakes!


      Will do, and remember in a few months when you're dealing with this


      Tha majority of California's will be experiencing this



    20. Global Moderator Justin's Avatar
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      10-05-2012 03:34 AM #20
      when I was in San Diego a few weeks back I was finding diesel for less than it is in Arizona.
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      10-05-2012 03:45 AM #21
      1) There is a special California petrol blend
      2) A larger percentage then normal of the Refinery capacity in California is currently offline due to a number of unrelated events.
      3) A least one shipment of crude going to multiple refiners was high in chlorine compounds causing refining difficulties.

      Result- Less gas.

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      10-05-2012 08:13 AM #22
      Quote Originally Posted by leaftye View Post
      Did you learn how to use facts from the debates lastnight? :rolleyes
      I don't think there were too many facts in the debate just half truths.

    23. Member 200HP4dr's Avatar
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      10-05-2012 08:24 AM #23
      Quote Originally Posted by bubbagti View Post
      Will do, and remember in a few months when you're dealing with this


      Tha majority of California's will be experiencing this


      I'm excited for our winter. I love seasons, and I love being able to have a house payment lower than most people's minivan payments.

      There are trade-off's, sure, but every time I hear a story about California, it makes me glad I live in the midwest.

      Chris
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      10-05-2012 08:58 AM #24
      We generally run into the same situations here in Ontario. The refining capacity is very limited, so when there are any unforseen shutdowns, the supply drops and prices spike. Several times we've had upwards of 1.39/L, which is US$5.15/gal. and we've all been conditioned to US$4.63/gal being normal now. Oil supply is certainly not an issue up here either.
      On a side note, this is part of the reason we get vehicles like the Orlando and Trax, since the higher fuel prices makes us more like Europeans for buying preferences (at least in the urban centres)

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      10-05-2012 09:02 AM #25
      Quote Originally Posted by CO Boy View Post
      I got 50 cents off per gallon today. Paid $3.28 and filled up the Silverado.
      I'm guessing Kroger? I paid 3.14 and filled up the Ram and parked the stratus.
      Previously Owned: 2010 Kia Forte, 2010 JK Wrangler, 2007 Passat, 2003 Jetta, 2002 Jetta, 1992 Sentra, 1998 Dakota, 1990 Ford Ranger

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