Gasoline Prices

Gasoline Prices

The gasoline prices in California are spiking this week. We are seeing mid $4 range per gallon everywhere and some places are showing over $5 per gallon.

California regulations require a special formulation of gasoline for low emissions standards. There are a small number of refineries that can produce this type. The spike in prices are caused by 4 separate events at 4 different refineries in California. These events have reduced the output of California gasoline with the demand not changing - hence a significant and quick rise in prices at the pump.

The analysts say this is temporary and once these events blow over, prices will be back down to "normal" - which is less than $4 for regular unleaded grade.

In my experience, gas prices jump up quickly but rarely return to normal quickly, if ever.

Gas prices in California are typically higher than anywhere else in the contiguous 48 states. This, among other reasons, it why Tesla cars sell well in California (and perhaps in other countries with higher gasoline prices).

I'm looking forward to my Model S so I don't need to wait in the long gas lines that this "temporary" issue has now created.

stevenmaifert | 05. Oktober 2012

I live in CA and am feeling "the pinch" too. I just hope my Model S comes before the civilized world has to deal with Iranian nukes. Will make today feel like the good ole days of low gas prices.

Teoatawki | 05. Oktober 2012

If they can even get it. Some stations can't get enough fuel to keep their pumps on.

BYT | 05. Oktober 2012

I have a feeling I will get offers on the street when I drive around in my Model S here near where I live. "Hey, how much would it take for you to part from that Model S?" In which I would reply, "Well Sir, I would take no less then $170,000 to part with my Model S."

dahtye | 05. Oktober 2012

And some gas stations in California are deciding to not sell gas until prices come down. They "say" they don't want to sell gouge customers with the high prices....however, that will only exacerbate the gas shortage.

So, now the lines are super long at Costco gas stations (which have the lowest prices around) and one Costco even ran out of gas.

Another reason I want my Model S quicker than ever.

stephen.kamichik | 05. Oktober 2012

Your gas is CHEAP! In Montreal we pay $6.50 or more for regular.

Brian H | 05. Oktober 2012

elections have consequences. Given Quebec politics, I'm surprised you're not paying $16.50 or more!

bfudge | 05. Oktober 2012

Driving my Nissan Leaf daily. Already have 2 friends that want to buy it from me when the "S" arrives. Don't know how people can stand to pay for gas when it just keeps supporting foreign conflict.

Brian H | 05. Oktober 2012

Don't get too wedded to that meme. US imports are dropping fast, and mostly come from Canada and Mexico, etc.; the Persian Gulf counts for about 20% of imports, and imports are now less than 45% of consumption.

Oaktowner | 05. Oktober 2012

Oil is fungible. Conflict in any oil producing nation will drive up oil prices worldwide, regardless of where you happen to buy it.

Brian H | 05. Oktober 2012

Yes. Nat gas not so much, tho'. Still many times US pricing in EU and Asia. Attracting LNG export interest.

Timo | 06. Oktober 2012

@stephen, your gas is cheap. In here we pay the equivalent of $9/gallon. AFAIK Norway is even worse (which is one of the reasons why it it the BEV hotspots in Europe).

Sudre_ | 06. Oktober 2012

I just remember back when I was a boy... Some gas stations would post signs that said they would not break a $100 bill. Now days you need to have a few with you on a road trip in case they don't take credit. Heck some took nothing larger than $20s.

petero | 06. Oktober 2012

Dahtye. Good points, also, CA gas formula is different from our neighboring states so out of state refiners can’t help fill the gap. Also, advocates are trying to get the rules bent to allow refiners to shift from summer formula to less stringent winter formula to help ease the pain.

Higher gas prices would serve the greater good … in the long run. Fewer SUVs, increased sales for more efficient cars, reduced gasoline consumption… Higher prices, unfortunately, hurt the people who can least afford it. Many large, pre-owned SUVs are very cheap to buy. During a gas crisis Manufacturers always seem to offer ‘huge’ incentives to move the metal.

dahtye | 06. Oktober 2012

Here's an interesting article regarding EV versus Gasoline.

I wonder which countries actually have the highest gasoline prices. So far, I've seen France (in this article) and Norway mentioned above.

I do agree with petero that in the long run higher gasoline prices is good for the growth of EV (and the environment). It would force people to rethink using their hydrocarbon spewing cars and start to move over the EV. Over time, this will lower the cost of purchasing EV due to more research and development into lower cost batteries/technology. Short term, demand will increase for EV and the current companies won't be able to keep there might be a spike in EV prices (or the resale price of EVs).

Carl Barlev | 06. Oktober 2012

Gas in Norway is about $10/gallon at present (moves up/down quite a bit, especially with xc-rate swings taken into account)... not that I care. My Model S will be the first car I've owned since 2005 (back in New Zealand).

I get around Oslo on my bicycle (recently upgraded to hybrid-electric with 250 W), so certainly looking forward to my Tesla :)

Reservation #: P1333 (Europe)

Brian H | 06. Oktober 2012

Maybe even get to see a bit of the countryside? ;)

Brian H | 06. Oktober 2012

Is the bicycle hybrid gas-electric, or hybrid human-electric?

Sudre_ | 06. Oktober 2012

Honestly I wouldn't be surprised if the refineries/oil companies... allow these kind of problems to happen so they can convince the people of CA to get rid of the rigid standards.

In reality it will probably just push everyone in CA to get a plugin hybrid or EV. I think plug in hybrids are the stepping stone to a full on EV because they prove how little you really need gas.

cerjor | 06. Oktober 2012

When asked what I could do now (at70+) that I couldn't do at 16, my reply was that now I can get $5 worth of gas in my VW.

Mark E | 06. Oktober 2012

Here in Australia we are being royally ripped off by the fuel cartel/companies.

While not as expensive as in Europe our fuel prices have jumped dramatically compared to both the international pricing and the value of our local currency.

Back in 2008-9 when oil was $US120 or so and our exchange rate was $US0.75, fuel was around $AU1.50 per litre. With oil now at $100 and exchange rate at $US1.03 fuel is often above $AU1.60...

Someone is making a buck or two at our expense.

I'm fed up with it and its a major reason for me wanting to go electric.

stevenmaifert | 06. Oktober 2012

We bought a LEAF for my wife today. She's been thinking about going electric for some time now, and this latest spike (we live in San Diego) was the nudge to convince her it was time. Dealer said they've sold 5 LEAFs in the last 24 hrs. Model S will come in a few months. Can't believe we will be an all electric family!!!

mrspaghetti | 06. Oktober 2012

One possible effect of increasing EV adoption may actually be gasoline becoming more available and/or cheaper for those who continue to use ICE vehicles. If EVs become a significant percentage of vehicles on the road, the pollution generated by ICE traffic may be enough of a reduced concern that states and localities may loosen regulations and requirements for special blends. The legal ability to sell 'generic' gas alone would drop the price in CA significantly, I suspect.

Docrob | 06. Oktober 2012

Mrspaghetti, once it reaches the point where EV use is having a noticeable effect on gas sales there will be inevitable closure of many gas stations as decreasd sales in an already narrow margin industry takes its toll. I would suspect such closures would outweighs the benefits you mentioned.

mrspaghetti | 06. Oktober 2012


In any event, we're a long way from EVs reaching any sort of critical mass. It will be interesting to see how things look in a couple decades on and along the highways.

ddruz | 06. Oktober 2012

stevenmaifert@a... Congratulations on the move to an all EV family.

Slindell | 07. Oktober 2012

Docrob: but we could put more chargers there!

Docrob | 07. Oktober 2012

Service station would be perfect for a supercharger and In the store you could have massages, can you think of anything better on a long trip then a 30 min supercharge and a massage?

uldry2000 | 07. Oktober 2012

I realy can't understand why americans pay almost nothing for their gas

Brian H | 07. Oktober 2012

Because the gov't is not (yet) as greedy as those in Urp.

erik | 07. Oktober 2012

$11,2/gallon currently in NL(yup, in greedy yurp...). Didn't feature in recent election debates. Prime price inelasticity example.

Brian H | 07. Oktober 2012

Yow, no wonder the Dutch all ride wind-assist bicycles!

erik | 07. Oktober 2012

wind-assist bicycles??

jkirkebo | 07. Oktober 2012

Ebikes charged from wind power ? ;)

BYT | 07. Oktober 2012

I have an eBike... :)

petero | 07. Oktober 2012

Brian H “ Carl;
Is the bicycle hybrid gas-electric, or hybrid human-electric?”
IMO, human power ultimately yields the highest levels of pollution! Yes-No-Maybe?

Cerjor. Your VW-$5 point is priceless. I too remember when gasoline was $.29 a gallon and smelled good.

Carl B. I am guessing, it probably doesn’t cost materially more to refine a barrel of oil into gasoline in the US, Europe, Au-NZ, Japan, etc. what makes the difference is the amount of taxes levied on the gasoline. I think Brian H is right, the US has probably shown more restraint on taxing gas and that is why gasoline is (IMO) too cheap.

One last observation. The short term/bright side , higher gasoline prices will stimulate the rich and needy to offer more $$$ to the greedy.

archibaldcrane | 07. Oktober 2012

Friend of mine tweeted this yesterday, getting gas in Beverly Hills:

"Time to get an electric car"

Oaktowner | 07. Oktober 2012

Here in the U.S. our taxes on gasoline are much lower than many parts of the world.

Some feel they're too low, but others undoubtedly (even some on these forums, I dare say) feel they're too high.

In general, the money spent on roads and highway systems does come from gas taxes. However, the government also spends lots of other moneys related to oil and gas that does not come from gas taxes...most notably defense spending for security (especially in the middle east, where maintaining the security of the oil trade is one of our primary goals), but also the subsidies given to the oil companies.

If all of that money was coming directly out of taxes on fuel, we would have to have much, much higher gas taxes to cover it all.

petero | 07. Oktober 2012

oaktowner. We do, it is called a massive deficit. Higher gasoline prices would be far more effective than CAFE regulation.

Brian H | 08. Oktober 2012

Ja, I vas tinking ov dose rigs wit lateens und spinnakers ...