Californian Gasoline Price Crisis May Be Over

California’s worst-ever one week surge in the prices of gas may be over at the moment. The current gasoline prices in the state reflect an average per gallon drop of 0.5-cent to reach the $4.666 mark.

Last week, each gallon of regular gas averaged $4.232. According to the Fuel Gauge Report of the AAA, that was  record high for one day. A sudden worry about fuel inventories led several traders to keep what they had and even purchase more than they needed, said an economist. Those who had lower supplies had to bid higher to obtain more.

Several gasoline stations charged almost $6 per gallon. Others closed instead of buying gasoline at an especially high price that may push them to sell without profit in case the market collapsed. Fifteen Costco gasoline stations suddenly closed.

An expert on fuel prices thinks that he may know part of the reason.

A series of refinery issues reduced statewide gasoline supplies by 2.1 percent, or 122,000 barrels to reach 5.77 million during the week that ended on the 28th of September. That was 10 percent lower compared to last year and the lowest supply level for that time since the year 1999, according to Bob van der Valk.

Meanwhile, consumer advocates ridicule the thought that current gasoline prices will quickly fall to provide some relief that Californians needed.

Public advocate Charles Langley for San Diego’s Utility Consumers Action said that people should not mind the projections for lower gasoline prices. Although the gasoline prices today reflects a 0.5-cent drop, they can be expected to stay high, added Langley.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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