I live in the east bay of California. On May 6th I bought gas at my local station for $3.97. Today that same Union 76 is $3.97. In the meantime I traveled to Ohio on May 7th and the local gas station was $3.65 now it is $3.95 on May 14.
What would cause gasoline prices to spiral up 30 cents over 7 days in Columbus, Ohio yet have no price increase in San Leandro, California over the same period. I keep expecting to come home from one of my recent Midwest trips to see $4.25 gas because up until now when back in the midwest gas was always 30-40 cents cheaper.
But this is the first time in the 12 years since I moved to CA. that gas prices are pretty much equal in California compared to where I lived in Ohio.
That is pretty devastating for Ohio because people here are not making California wages. This is really out of control. Thank you Congress.
Different regions, refineries, taxes, demand and distributors. Mostly refinery capacity in the region.
And, believe it or not, refiners aren't making squat on gasoline at the moment. You can consult our FReeper colleague, Eric in the Ozarks, who deals in high-end product, for precise details on this.
This too will change over the summer. I think you pretty much (if you're a trader, which I am) have to buy the RBOB crack spread for August (buy August RBOB, sell August WTI crude against it). Perhaps I'm short-sighted, but there is, to my view, NO freaking way that the refiners will continue to lose money or barely break even on gasoline over the driving season.
Well, I guess we'll all see, shortly, eh? Just for the record, you are absolutely spot on about fixing the blame for this fiasco on the Regress. Every time those sods 'regulate' energy mkts, every time they prevent exploration and development of energy resources, they create price rises, or shortages, or both...and THEY make a tidy 18.4 cents minimum on every gallon of gasoline sold in the US.
Nice racket, eh? The eeeevil 'Big Oil' companies would kill to make 18.4 cents/gallon; their typical margin is 8-12, and right this minute it's negative or nearly so. Not to mention the extortive taxes 'Big Oil' pay the goobermint.
Before you ask, NO, I do not work for any oil company, driller, refiner, or jobber. I'm just an energy trader.
FReegards to you!
The same thing happened after Katrina in August 2005, as I recall - California prices were actually equal to or lower than some other areas of the country.
Around August 2005 you can see in this graph Ohio's average price exceeding California's, albeit briefly.