Southern Californians are in a state of shock. Again. Prices for regular unleaded gasoline shot up literally overnight late last week, and they continued climbing this week: According to GasBuddy.com, the average price for 87-octane gas in the Los Angeles area was $4.155 Monday, up 20 cents from Sunday, and 60 cents over the past week.
At some stations, the disparity was even more of a jolt: At a 76 station in Sherman Oaks, the price went from $3.99 to $4.59 in minutes last Friday; at a Mobil in North Hollywood, it was $4.99. The national average was only $2.78, a benchmark tied to the relatively low price of oil, which stood at $57.85 Monday.
It’s a familiar ritual in SoCal: Prices jump for no apparent reason (at least this time no one can say they weren’t warned); oil companies and refineries offer rationalizations, based on byzantine economic factors; often people in power demand answers, possibly even scheduling some kind of inquiry or legislative hearings; and then prices float back down again, never as quickly as they rose, and consumers forget about what the heck just happened.
The latest explanation, as parroted by many among the local media, is this: There’s a shortage of gasoline inventory, and a drop in fuel imports coming from overseas. California has a cleaner standard for gas than the rest of the country. And by the way, it’s summer, etc. Allison Mac, an analyst for GasBuddy, also said the explosion and fire at the ExxonMobil refinery in Torrance back in February has had a lingering effect: “That is still down,” she told NBC4, adding that the refinery accounts for about 10 percent of SoCal’s gasoline supply.
Jamie Court, president of the Santa Monica-based group Consumer Watchdog, suspects price-fixing. “Make no mistake, this is all about pure profits for the oil companies,” he told KTLA-TV. “Crude oil costs are like under $60 a barrel right now. We have four refineries that control 78 percent of the market. All they have to do is pull a couple ships coming in, and the prices go up 60 cents in a night.”
Consumers have a right to be outraged. But many of them are strangely resigned, insisting they have no control over the gyrations of the gas market.
“We have to pay for gas. I mean, like, we’ve got to get around. There’s no getting around it.” — Jaclyn Williams, Van Nuys, to ABC7.
“What are you gonna do? I mean, you gotta … I actually bike to work a couple times a week, so I try to balance it out like that. –- Jason Bielawski, Los Angeles, to Channel 5.
“The price went up real bad. Whose fault is it? Let’s blame somebody,” he joked. “What can we do?” — Frank Zamarripa, Santa Ana, to the Orange County Register.
Drivers don’t have to just take it, and they don’t have to start riding a bike in L.A. traffic (if you do, use a scuba tank). All they have to do is start using E85, which is up to 85 percent ethanol (a cleaner-burning, cheaper fuel) and 15 percent gasoline (the dirtier, crazy-expensive fuel).
You might be driving one of the more than 17 million flex-fuel vehicles, which can take any ethanol blend up to E85. Others who don’t own an FFV are filling up on E85 anyway, owing to the attractive price point. There are more than 2,600 stations that sell E85, including many in Southern California. I dropped in at the G&M station at Beach Boulevard and Warner Avenue in Huntington Beach. The station has two Propel Fuels pumps that dispense E85 (Propel the company featured in PUMP the Movie), and the best attribute of ethanol is right there on the marquee:
$2.99. That’s the price G&M was charging Monday for E85, a full dollar less than 87 unleaded.
Despite that differential, the green Propel island was getting no love from customers. Someone had just been there, a truck, it seemed, because it had just pumped 24.7 gallons for $74.00. The other drivers lined up to pay the exorbitant price for gasoline.
They included Janet Martin, a web designer from Laguna Beach, who filled up her Toyota Camry. “I think it’s greed,” she said when asked her theory of high prices. “It seems to get more expensive when it’s tourist season or summer vacation, where people are using their cars more often.
“It’s frustrating, but we have no control. It’s the people up on top, it’s the people who have the money, it’s the people that are in charge of the corporations …”
As long as oil remains our predominant fuel choice, American consumers will continue to be vulnerable to market gyrations. Prices go up and down, sometimes based purely on market forces, other times based on events in the Middle East, other times still based on not much at all. As former Shell Oil president John Hofmeister says: “We will never get past the volatility of oil until we get to alternatives to oil.”
Californians should know this better than anyone by now, and they should be first in line to demand alternatives. Learn more about what you can do at our Take Action page.