Photo of the day: $4.83 on Pico

Yeah, it's that nutty expensive station on Pico and Barrington in West L.A.

While I've got your attention:
--Los Angeles Gas Prices reports that the average price of regular in the city is $4.53 a gallon, up from $4.33 a week ago. The website reports a high of $4.99 in L.A.
--Interesting tidbit: the "spread" between L.A. gas prices and the national average has been widening significantly. A month ago it was 17 cents a gallon ($3.88 in L.A. vs. $3.71 nationally); today it's 47 cents ($4.53 vs. $4.06). An LA Land coffee mug* goes to the first commenter not named Johnny Dollar who explains that one.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo: L.A. Land
*It's a virtual mug.

Comments

[aldo818]

Illegal aliens. No, wait, they carpool.
Is our state charging more in taxes? Price of new refineries being passed on to California?

[bobsuruncle]

That is due to the special blend of gasoline that CA requires due to the strict air quality regulations and only a handful of refineries can produce it.

[Uncle Billy Pumps @ Mt. Pelerin]

Maybe it's just a plain old inflationary spiral. Station owners know they're going to be spending far more money on their own gas driving in from Lancaster, so they're pricing it in.

[Ace]

'How about those gas prices' is the new 'how about this weather'.

I took a look at my family's gas budget after reading that story about how Californians are the least affected by the high gas prices. My family of 3 spends about 1 percent of our income on gas. That is it. We actually spend more money on car insurance than gas and spend about 3 times as much on car depreciation than gas. Gas is only about 1/5th of our monthly transportation cost.

I see a news report every night on how hybrids are selling faster than they can build them. GAS IS THE LEAST EXPENSIVE PART OF DRIVING. It is amazing how many people will spend $25k on a hybrid to save $200 a month in gas.

[peteviles]

bobsuruncle wrote, "That is due to the special blend of gasoline that CA requires due to the strict air quality regulations and only a handful of refineries can produce it."

Thanks, bobsur. That explains why there is a spread in the first place, but it doesn't explain why the spread would nearly triple in 30 days. Nice effort but no (virtual) LA Land coffee mug.

[homeownerandhappy]

Uncle Billy should change his name to Uncle Dick

[sfvrealestate]

Couple of things. A German acquiantance tells me that gas in Germany costs around the equivalent of $8 per gallon. Yes, we all know that Europe is more expensive, but $8!!!

And, relating this back to real estate: I expected the bad gas/food price news to really cut into attendance at my open house this past weekend. Nope. Attendance was actually up from the highs of 2006.

[MyLessThanPrimeBeef]

I am reminded that a good student never answers someone else's question. A good student answers his own question.

So, I would say this about inflation. The Chinese not only invented paper, but not knowing when to stop, they also invented paper money...it's like we Americans not content with just inventing securitization, but had to have something new, the subprime securitization. In any case, this is what one Chinese historian had to say about that (I am quoting from Jacques Gernet's Daily Life in China, On the Eve of the Mongolian Invasion: 'From this time on, says one inhabitant of Hanchow, commodities went up in price enormously, and cash coins lost much of their value: banknotes had made their appearance.'

There you have it - paper money, unaffordable gas and placards of 'Will Work For Gas' by stranded motorists wherever there is a motorway.

And the would-be conquerers are not that far away either. Look out, the Chrysler Buidling.

Here is one more lesson from history: After the Mongols conquered China, the Arabs were hated there because they became fabulously rich, being the victors' exclusive tax collectors (I like to think) by virtue of their copyright to the arabic numbers that were really handy in collecting for the Khan. And they are fabulously rich today again even though their copyright to the arabic numbers had long since expired. Also they don't have to put up with the Mongols either.

[TakeFive]

An LA Land coffee mug* goes to the first commenter not named Johnny Dollar who explains that one.

We just completed the switch to summer blend:

Retail stations in much of the southern part of the state must begin selling the summer blend by April 1. For most of Central and Northern California, the deadline for retailers to change to summer blend is May 1;

http://www.energy.ca.gov/releases/2006_releases/
2006-03-08_gasoline.html

[FreedomCM]

Couple of things. A German acquiantance tells me that gas in Germany costs around the equivalent of $8 per gallon. Yes, we all know that Europe is more expensive, but $8!!!
**************************

Of course, that is due to the high taxes ($3 or more, compared to the 63c in CA).

But for that, they get free healthcare and usable public transit.

[MyLessThanPrimeBeef]

sfvrealestate, I bet if you lower the price more, you will get an even bigger attendance.

In fact, I will bet you a meal at Warren's All You Can Eat Buffet that if you lower it to zero, you will have more attendance than that of the next Lakers-Celtics game.

[TakeFive]

California has historically seen some of the highest, and most volatile, gasoline prices in the United States (Figure 7). The reasons for the striking differences in the behavior of California gasoline prices, as compared to those in other parts of the United States, are numerous. Several major factors contribute to the problem:

· While the California refinery system supplies most of region’s needs, the refinery system runs near its capacity limits, which means there is little excess capability in the region to respond to unexpected shortfalls;

· California is isolated from and lies a great distance from other supply sources (e.g., 14 days’ travel by tanker from the Gulf Coast), which prevents a rapid resolution to any supply/demand imbalances;

· The region uses a unique gasoline that is difficult and expensive to make, and as a result, the number of other suppliers who can provide product to the State are limited.

As a result of these factors, refinery outages on the West Coast at times can cause prices to surge. In both California and other U.S. regions, outages typically occur during the first quarter as refiners undergo maintenance prior to the peak summer demand period, and 2005 is no exception. California refinery outages to date in 2005 have not appeared unusual, and gasoline production through April this year has remained adequate to meet demand without creating unusual gasoline price surges.

California’s ban on methyl tertiary butyl ether (MTBE) beginning in 2004 (many refiners phased out MTBE in 2003) added to the State’s already tight gasoline balance, as refiners lost production capability when replacing MTBE with ethanol. This, along with continued demand growth, has contributed to price pressures. From 2000 through 2002, **** California retail gasoline prices averaged about 19 cents per gallon more than the U.S. average gasoline price, but in 2003 as MTBE began to be removed, California prices averaged 27 cents per gallon higher than the U.S. average ***** , and remained at that level through 2004. In 2005, the California gasoline market, apart from crude oil, while tight, seems to be slightly less so than in 2004. From January through May 2, California retail prices have been about 4 cents per gallon closer to U.S. average gasoline prices than they were in 2004.

http://www.eia.doe.gov/pub/oil_gas/petroleum/
presentations/2005/house050905/house050905.html

[Jetro Q Walrustitty]

If you save $200/month in gas with a hybrid, that's $2400/year. Over 5 years that's $12,000, which is well over the difference between the price of a hybrid and a regular car. You have to do a lot of driving to save that much in gas though.

I drive a Civic Hybrid and when I bought my car at the beginning of 2007 I calculated that the break-even point between it and the standard Civic was after 3 years. That included that $2100 tax refund but it was also based on $2 gas so the break-even point will be sooner now. At these prices and my mileage I'm still not saving $200/month (maybe $100) but I am able to go 400 miles on about $42 of gas.

[peteviles]

TakeFive writes, "We just completed the switch to summer blend ... Retail stations in much of the southern part of the state must begin selling the summer blend by April 1."

Then TakeFive writes a really long comment with a bunch of information about gas prices in California.

Thanks, Take. Neither comment clearly explains the May spike, though both offer possible reasons. And I give you points for the double-barreled effort. You are currently leading the race for the coveted (virtual) LA Land coffee mug.

[yours truly, Johnny Dollar]

What do you have against Johnny Dollar?

[yours truly, Johnny Dollar]

Gas stations fall into several categories:
a) company owned and operated
b) leased to individuals
c) leased to operators with multiple locations.

As for Pico and Barrington, the Union 76 station
has a fuel monopoly on that intersection. Price
is determined by traffic count at a location and
distance from competitors.

[yours truly, Johnny Dollar]

For those accusing the Union 76 station at
Pico and Barrington and the Shell station at
Main St. and I-10 of price gouging, using this
same mind set.....
every store other than WalMart is price gouging?

[Uncle Billy Pumps @ Mt. Pelerin]

Oo Oo I know: we're being shaken down again, like before with the electricity.

Or maybe it's because we don't have any pipelines coming in -- it all comes by truck and ship? The Unions are squeezin us?

The rest of country hates us?

[TakeFive]

Pete V wrote:

"Thanks, Take. Neither comment clearly explains the May spike..."

Uh, Pete, from the first gov doc:

"...deadline for retailers to change to summer blend is May 1..."

There's bound to be a bit of lag time for the price to propagate down the supply chain. Don't think they throw away the winter blend. They're probably allowed to sell it off since it is impractical to return it or store it. I suspect "change" means no future orders of winter blend.

Second, you asked why the spread. The second gov doc outlines the reasons for the spread.

I want that mug, damn it. For my virtual office.

[TakeFive]

Posted by: Jetro Q Walrustitty:

"I drive a Civic Hybrid and when I bought my car at the beginning of 2007 I calculated that the break-even point between it and the standard Civic was after 3 years."

That's if all goes well. Hybrids are vastly more sophisticated than non-hybrids, Let me guess - dealer service only?

Forget it. You want to save money? Buy a 2-3 year old Civic from some kid that can't keep up the payments. You might even get some nice spinners...

[Uncle Billy Pumps @ Mt. Pelerin]

Guess we could go find some graph that shows the seasonal spikeages and see if that accounts for what Pietro is talking about. (Though I'm convinced it's the Unions or Michael Milken). It can't be because of Trump becuase Trump is imprisoned in a tiny little framed ad at the top right of this page. Again.

Young people, please go find graph if you have any "energy."

{waving back to Milla}

[peteviles]

Take Five, Take the Mug. No, seriously, take it. It's yours.

[Schadenfreudlosheit]

Why'd the spread triple? "Stickiness" crossing the $4/gallon psychological/mechanical barrier outside CA. Psychological: no merchant wants to be the first to post the dreaded "4" in the dollar column on their sign. CA was long past that. Mechanical: some red state and rural blue state merchants still have gas pumps that can't be set past $3.99/gallon. To charge more, they have to convert to $/half gallon, which is now happening.

[TakeFive]

"Take Five, Take the Mug. No, seriously, take it. It's yours."

Pwned!

And I was fittin' to go all Milla on you fot it.

Oh look, it's made in China. Mmmmm, leaded decaf.

[vipness]

Umm... because we are willing to pay it? Seriously I haven't even begun to think of alternatives to filling my tanks.