Here’s what gas prices in Los Angeles have done over the past month.
That’s an 11 percent spike in the past week. The problem is a massive drop in California’s gasoline supply, particularly in the southern part of the state. Gas stations are literally running out of fuel. And without fuel, they’re closing up shop. From Bloomberg:
Gasoline station owners in the Los Angeles area including Costco Wholesale Corp. are beginning to shut pumps as the state’s oil refiners started rationing supplies and spot prices surged to a record.Valero Energy Corp. stopped selling gasoline on the spot, or wholesale, market in Southern California and is allocating deliveries to customers. Exxon Mobil Corp. 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. …
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.
The primary reason behind the shortage is a series of refinery outages in the state. California’s clean fuel requirements mean that few out-of-state refineries supply it with gas.
Some additional bad news for those who think they have a workaround for the shortage: jet fuel prices are also rising, making commutes by jet that much more costly.
There are two silver linings here. The first is that any reduction in driving means improved air quality for the region. And the second is that people in southern California never drive anywhere anyway, thanks to the lack of sprawl and robust public transportation.