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By Catholic Online (NEWS CONSORTIUM)

2/22/2013 (2 years ago)

Catholic Online (www.catholic.org)

It's not a happy time to drive in California.

California is suffering the worst spike in gasoline prices in over a decade and is now paying the highest prices in the country, apart from Hawai'i. The rise in cost is due to refinery maintenance, production of expensive summer gasoline, and speculation.

Many drivers pay from $60 to $100 to fill their tanks depending on size.

Many drivers pay from $60 to $100 to fill their tanks depending on size.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

2/22/2013 (2 years ago)

Published in U.S.

Keywords: gas prices, California, refinery, production, shocks, hybrids, alternatives, speculation


LOS ANGELES, CA (Catholic Online) - With prices well above $4.00 and even above $5.00 where gas is premium, California drivers are feeling the pain at the pump. In less than a month, prices have spiked by 57 to 59 cents, the largest single month increase on over a decade.

The prices paid by California motorists are very close to prices paid by those living on the island of Maui, where the nation typically has the highest prices. In Wailuku, HI, the price for a gallon of regular gasoline is $4.399. Southern California residents are paying $4.316 per gallon on average.

The meteoritic rise in prices comes as a result of an unusually high level of maintenance required to keep the refineries operating safely. Such disruptions will become increasingly common as the few refineries still operating in California continue to age.

California also switches to a more expensive blend of gasoline in the summer to help fight air pollution, particularly in the state's San Joaquin Valley, which suffers the worst air quality in the nation. This switch requires that refineries shut down for several days to make the transition and happens twice per year.

Finally, speculators are being blamed as they bet on high California gas prices for this time of year. Their correct bet means a number of investors have made good money in the past month.

There is relief on the way. The summer blend switches should be complete before the end of March and speculators are pulling their profits out of the market. Both of these factors should increase supply and reduce prices.

High gas prices are unpopular everywhere, but Californians are acutely aware of them in a state where a car is not just a luxury, but virtually mandatory. With plenty of room to expand, most cities have grown into sprawling metropolises rather than building upwards as is done in many older cities. Nor have mass transit options kept pace with growth. The result is a dependence on automobiles that can get expensive when gas prices spike.

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