Gas prices continue to soar in California

(CBS News) LOS ANGELES - Gas prices rose 17 cents overnight bringing the one-week increase in California to nearly 36 cents.

At Sam Krikorian's gas station in North Hollywood, the price of gas has jumped 66 cents in four days.

"It's been killing everybody," said Krikorian. "It's going to kill the business. It's going to to affect the economy."

Five days ago, he filled the station's 8,000 gallon tank for $30,000. He cannot afford to fill it back up because it would now cost him $50,000.

"Twenty-thousand more for the same truck, same refinery, same kind of gas which doesn't make any sense," said Krikorian.

The price spike is being caused by the temporary loss of two California refineries. Once caught fire in August and a power outage closed another this week. The state uses a special blend of fuel to cut down on the smog. Almost all of the blend is made in California.

Tom Robinson owns 34 gas stations. He says until the refineries are fixed prices will remain high.

"California is geographically isolated in the U.S.," said Robinson. "California has special fuels and so you have to be able to not only get fuel here but it has to meet our specifications."

Some stations are now charging nearly $6 a gallon. Sam Krikorian is planning to shut down his pumps when he runs out of gas.

"[In] a couple weeks or a month you're going to see a lot of independent people like me they're going to go out of business," said Krikorian.

Before Friday ended, Krikorian ran out of gas. His pumps will remain off until the price comes down.

[USEYOURBRAINS-]

Prius Plug-In!

[rayinmn]

Even though California has a Democratic governor and a Democratic controlled Legislature I suppose it should be expected that this would be the Republicans' fault.

Obviously Bush is to blame.

While everyone's waiting for the true culprits to identify themselves I am delighted at the possibility of Californians running themselves out of money and gas.

The image of the sun setting on them as they're stalled on their freeways while rushing to vote to reelect their legislators and Pres. Obama should be made into a new state emblem.

[forumcomments]

This is an interesting article. We are seeing a serious regionalized climb in fuel prices. This is not a normal situation. Normally prices increase and decrease at a national level. To have such high prices in one state is truly unique and makes you wonder why and if price fixing isn't going on. It also tells us just how volatile fuel prices can be.

[STBY21]

The problem is not the oil companies, but the effects of regulation and taxes on Californians. I live in the Southeastern U.S. and we aren't even up to $3.50 per gallon. We have lower state gas taxes than California and we do not require a special blend that is more expensive to produce. California is a special market island because of the lower smog blends that are mandated by the state, above even the federal regulations.

"The result of this targeted approach to air quality has been to create gasoline market islands," John Cook, director of the petroleum division of the DOE's Energy Information Administration, said before the U.S. House of Representatives Committee on Energy and Commerce on May 15, 2001.

Cook pointed at California and the Chicago and Milwaukee areas as primary examples of gasoline-market islands. The clean-burning requirements in each of these areas are unique to that individual area, and only a few refineries can produce the specialized products. High demand, a supply problem at a refinery or a problem with a pipeline can cause pricing in these areas to surge. Other states and municipalities also have their own requirements for cleaner fuel.

In California, the state government has set its own reformulated gasoline rules that are stricter than the federally mandated clean-gas laws. The state adopted requirements for cleaner-burning fuel in 1996 [source: ARB]. This is why Californians pay a higher price for cleaner fuels -- this, plus a local sales-and-use tax, the federal excise tax and a state excise tax. California's distance from the refineries located near the Gulf of Mexico can also add to the cost of gasoline if it chooses to obtain gas supplies from those refineries.

No greedy oil companies or price gouging local gas stations. Sounds more like a simple supply and demand problem that is magnified by the effect of state regulations and taxes.

[pokey5735]

You can blame your "President" for the high costs of energy and he isn't finished yet. Re elect him and see where the prices go. Will the people of California every wake up? Stop voting for liberals!

[forumcomments]

Much of the high price in general is due to a dollar that is weaker than we have ever seen. If the dollar was strong the price would be much lower. The weak dollar is what has driven the high rate of inflation.

[Hardshell220]

Like voting matters anymore.Everybody needs to wake up and see that it does not matter what puppet wins.They are still controlled by the puppeteer behind the curtain.

[phwtb100]

Having 'cleaner' air is a great thing until your citizens can no longer afford to pay for it. California is either going to have to bring in standard fuel like the rest of us use OR, like everything else in California, let the government pay the difference.

[lami987]

Regardless of what the conditions are oil companies can find something to increase their profit. One thing is sure they would not increase supply of gas. But they would gladly increase their lobbying budget.

[ScottyKu]

Make no mistake about it. This is a test by the oil industry to gauge public reaction to higher gas prices. The demented folks in the Peoples Republic of Cawlifawnia should shut the whole state down. Nobody go to work, or shop, or go anywhere for a couple weeks. But they'll whine and complain and line up to buy the gas at $6 a gal or more, rather than take any kind of effective action. And there will be no "recovery" in this country. The oil companies, along with the banks and insurance companies will extract every last dime in our economy.

[TheIrascibleOne]

"California is geographically isolated in the U.S.,

More to the point, California is >mentally< isolated from the rest of the country. And if you need any proof, just take a look at the demented moonbat they elected as their governor.

[qyeteye]

How old are you?

[UForgotPoland]

Just wait til we go to war with Iran, gas will shoot up and it will happen no matter who's President.