These gas prices are giving me – well,indigestion.
California gas prices that were heading straight for $5 in October are now down – going on $1.10 this week – from a high of $4.65 on average in the state in October to around $3.59 a gallon today statewide says Gas Buddy.
Better yet, there has been a steady drop in the lowest price for gas in the state now down to $3.12 in the San Jose and Lodi area this week.It’s down to $3.29 in Fresno, $3.33 at stations in Tulare and in San Luis Obispo the low price is $3.63 at Costco.
Some areas of the U.S. are seeing prices under $3 a gallon, and here in Southern California there is a lot more room for prices to fall judging by wholesale gas prices,” said Auto Club spokesperson Jeffrey Spring.
“As of Wednesday(Dec 5), Los Angeles reformulated gasoline wholesale prices were $1.20 lower than the current Los Angeles average price. Normally the margin between wholesale prices and prices at the pump is much lower.”
But there is a familiar story bubbling up in the news this week.
Refiners are having some maintenance issues and there are plans to idle capacity to do annual upkeep after the first of the year.Bloomberg reported December 10 that future prices are up in the past few days and the 7-week drop in retail prices may be ending.
So much for $3 gas.
One issue here appears to be lack of competition.
In May 2012, seven companies made 94% of all sales. The seven companies are all vertically integrated with both retail sales and refinery operations. Sales data is available from the California State Board of Equalization.
Consumer groups last month asked the California State Attorney General Kamala Harris to launch a criminal investigation into the conduct of oil companies in the state based on new information that oil refiners were running refineries and building inventories even when they said that they were performing maintenance when prices spiked over few days in September/October.