Monday, April 21, 2008

Where are the cheap gas prices in California?

I found this off a government website as to why there are not cheap gas prices in California. I'll try to paraphrase it:

"The State of California operates its own reformulated gasoline program with more stringent requirements than Federally-mandated clean gasolines. In addition to the higher cost of cleaner fuel, there is a combined State and local sales and use tax of 7.25 percent on top of an 18.4 cent-per-gallon Federal excise tax and an 18.0 cent-per-gallon State excise tax.."
California prices are more variable than others because there are relatively few supply sources of its unique blend of gasoline outside the State.... Supplies could be obtained from some Gulf Coast and foreign refineries; however, California’s substantial distance from those refineries is such that any unusual increase in demand or reduction in supply results in a large price response in the market before relief supplies can be delivered."

That part I found pretty interesting. California is so far away from the Gulf of Mexico region that it is not cost effective to ship it to California. You can't have cheap gas when you have to transport it so far away.

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