Friday, October 05, 2012

Wonderful. Just fucking wonderful.

"The squeeze is on, and people are doing desperate things," is how one independent described the situation in California. As Bloomberg reports, a shortage of supply along with drastically higher wholesale prices of gasoline has caused 'mom-and-pop' gas stations to close down as their margins are destroyed. Even larger firms, such as CostCo, are closing sites due to the shortages as Los Angeles and San Francisco gas prices jump 30-45c in a few days.

As one owner noted: "I can get gas, but it’s going to cost me $4.90 a gallon, and I can’t sell it here for $5," and another added that "we’re going to start shutting pumps Friday, as 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."

The problem is likely a short-term one according to some as the temporary shutdown of local refineries (after Chevron's Richmond refinery fire) and maintenance is completed but it is clear that even a short-term blip in wholesale prices (whether driven by local supply or global geopolitics) causes pain as it would appear we are close to 'inelastic' levels of demand.

California gas has not fallen as the national average has...

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I haven't seen any stations closing around here but I'm paying about $4.35 a gallon today. Tomorrow may be higher. I have seen a couple places that's selling gas for $4.05 but they're generally in neighborhoods that you have to pump your gas with a drawn weapon so I pass on those unless the little yellow 'get gas or start walking' light has been on for a few miles. Saving a few bucks ain't worth having to shoot somebody and then having to deal with the law.
This is the only state I've ever lived in that you keep your tank topped off if you can in case gas prices spike overnight. I've filled up one week for 45 bucks and then a week later at the same station pay $55 and that's with a 14 gallon tank. It ain't unusual to pull up to the pump and see where the previous customer paid $125 for a fill up. Let me tell you how bad it is - my gasoline bill is at least $60 a week for my truck and $25 a week for Lisa's jap car. And that's if we don't go anyplace out of the ordinary.
It's gotten so bad lately that for me to go up to the hills to shoot or fish, it's gonna cost me a fifty dollar bill. Add in the cost of ammo, lunch, etc. and my day of 'free entertainment' just cost me $100 US. Let me put it another way: For the past 18 years, my pay raises at work have not been able to keep up with the price increases of gasoline much less the rest of the cost of living.