Are California Gasoline Prices Being Manipulated?

Oilprice.com ^ | 05-20-2019 | Irina

[bananaman22]

Market manipulation could be behind the fact that California drivers pay more for gasoline than the rest of the country, the Lost Angeles Times reports, citing a statement by the California Energy Commission.

“The Energy Commission has identified a number of possible causes that could explain the residual price increase in California, ranging from refinery outages to potentially market manipulation,” the statement, sent to Governor Gavin Newsom, said.

The commissions said it has identified several possible reasons for the fact that as of Friday, drivers in California paid an average of US$4.05 per gallon of gasoline, which was US$1.20 higher than the national average. Besides market manipulation, the reasons also included refinery outages.

[IronJack]

I hear that “It’s the taxes” excuse a lot too. But the tax rate doesn’t increase as the price goes up, so while it contributes to the overall price, as the other costs go up, the tax as a percentage of the whole goes down.

This is obviously true only where the tax is a fixed qmount, not a percentage of the sale price.

If people drive less during the winter and demand decreases, why does the price always go up in the fall? The excuse is the changeover to winter blends. But that should be a short-lived increase until the new blends are in place. Why is the price still high after two months of changeover?

[Oil Object Insp]

As I said it’s complicated.

In the fall, and on through the winter to the spring a lot of the refineries have planned maintenance shutdowns. At any given time ten percent or more of our capacity is effected, which means even though there is less driving, they’re not making as much, or in some cases ANY fuel. When this happens in a market with little or no other refining the price can go way up.

This doesn’t factor in the unscheduled shutdowns that happen.

As I said there are lots of different reasons the price can fluctuate.