Why is gasoline so cheap in the U.S.?

Gas costs a lot in Mid Calif cause a refinery went kablooie in SF. Couple months later after taking as much money as possible from us & prices were dropping, it happened again.

I’ve been meaning to talk to you about this, Handy. You people up north need to be a little more careful with your refineries. Every time one of them blows up, gas prices down here in So. Cal. go up 10 or 20 cents! Haven’t you guys ever heard of “No Smoking” signs?

For those outside California, we have a strange situation here right now. California recently required a change to a lower polluting gas formulation. When the changeover occurred, there was only one refinery on-line to produce the new formulation. Supply and demand being what it is, the price went up. In mid-March I was paying around $1.15US per gallon, and by mid-April the price was as high as $1.80US per gallon. Since then, additional refining capacity has come on line, but the most recent price at my local station (6/16) was $1.49US per gallon. Various attorney’s general are looking into this, since the price of crude is not high enough to justify the price. Conspiracy theorists should have a field day with this. Expect the first books shortly…

A year or so ago crude oil prices fell significantly, but our local pump prices didn’t really change. I have a friend who owns a small oil company drilling mainly in Nevada. He got killed on pricing during that time, since crude is sold on spot markets as a commodity (no long term contract pricing to smooth out the bumps), and his drilling costs were just about as much as the selling price. He maintained that the big oil companies were losing money on their drilling operations at those prices (as I recall, somewhere around $10US per barrel), but were vertically integrated, so could make up the lost profits in the refining and sales end - something my friend couldn’t do. Anyway, the attorney’s general were going to look into that too, but we never heard much of it after crude prices rose.

At the least, nobody’s ever sent me a refund check…

– Mike –