Why Are West Coast Gas Prices Rising While Dropping Everywhere Else?

While the national average for a gallon of gas has dropped nearly 20 cents since peaking in early April, prices on the West Coast of the U.S. recently began rising again, even as prices in every other region of the country trend downwards.

For the week ending May 14, the U.S. Energy Information Administration had the national average at $3.814/gallon. But on the West Coast, that price had gone up to $4.308/gallon, up $.137/gallon from just two weeks earlier.

Even when you subtract California from the equation, the average West Coast gas price is still $4.11/gallon, an increase of $.052/gallon over the previous two weeks.

Los Angeles and San Francisco both surpass the California average of $4.414/gallon with prices of $4.489 and $4.433 per gallon, respectively.

Compare that to Cleveland ($3.697/gallon) and Houston ($3.713/gallon).

A rep for the AAA calls it a “a tale of two coasts,” but the graph above shows that the only other region whose prices haven’t matched the national average is the Rocky Mountain region, where prices have generally maintained the same level during the last several weeks.

So what’s the problem?

According to USA Today, analysts say it’s not increased demand and instead point the blame at a refinery slowdown in the western part of the country.

A rep for Western States Petroleum Association tells the paper that unexpected maintenance at refineries is partly to blame and “If they are patient… the decline in crude oil price we’re seeing … should translate to lower prices at the pump.”

But a gasoline analyst at Utility Consumers’ Action Network in San Diego tells USA Today that there is a problem with lack of competition among refineries in the area: “We’re not saying there’s a conspiracy. It’s just that with this few competitors, it’s very easy to game prices by turning off capacity.”

UPDATE: Consumerist reader Victor points out that Congressman Peter DeFazio has asked the Justice Department’s Oil and Gas Price Fraud Working Group to look into the timing of the “maintenance” slowdowns at a number of West Coast refineries.

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  1. Agent Hooter Enjoys Enhanced Patdowns says:

    “We’re not saying there’s a conspiracy. (nod wink) It’s just that the cat always comes by the back door. And the rooster crows at midnight. You know what we’re saying?”

    • Sanspants says:

      A nudge is as good as a wink to a blind bat, eh?

      say no MORE.

      • Loias supports harsher punishments against corporations says:

        Fannie’s your aunt. Bob’s your uncle. I gotcha.

    • Scooby111 says:

      You’re right. It is a conspiracy. A conspiracy to keep new refineries from opening and to close or limit current refineries. And people only need to look to their legislators to ask why it is happening.

  2. partofme says:

    Can we get a timeseries that is more than a month-long? Perhaps then we could maybe put the magnitude of the discrepancy into some context…

  3. TheMansfieldMauler says:

    So a way to fix this is to…approve and encourage the construction of more refineries so there is more refinery capacity and competition?

    Yeah good luck with that in CA.

    • Marlin says:

      Yea except we have over capacity as it is now; so another refinery would do nothing.

      Sorry to burst your right wing talking point with facts.

      “Valero Energy said it expects more refining capacity to come offline because of weakening fuel demand”

      “U.S. Crude Oil Refining Capacity Near 30-year High”

      • TheMansfieldMauler says:

        So then why the complaints? If refineries are shut down (even temporarily) liberals think that’s just great even if it means higher prices. In fact, high gas prices are great!

        http://www.youtube.com/watch?v=qKdScVerrBU&feature=related
        http://www.youtube.com/watch?v=k4yFsaxw6L8
        http://www.youtube.com/watch?v=eRuXrbjlrRg&feature=related

        • Marlin says:

          YOU said we need more more, facts say other wise.

        • who? says:

          We may or may not have enough refinery capacity, but it isn’t the “liberals” stopping refineries from being built, it’s that the oil refiners not wanting to build any more capacity. Refineries are like airplanes. They’re expensive to build and operate, so the refiners want to build and operate as few of them as possible to meet the demand. If that means shortages every once in awhile, then that’s not really a bad thing from their perspective, since it jacks up the prices they get for their product.

          In general, gas price swings are much more related to refinery capacity than oil prices, and refinery capacity is controlled much more by the desire of a small number of refiners to control refinery capacity than it is by any “liberal” regulations that exist preventing refinery construction.

          • fsnuffer says:

            Please. If the refiners can make money off of new infrastructure they would do it because they are the greedy 2%. With the regulatory environment in CA and the insane taxes they can’t earn a decent return on capitol so they will allocate that capitol elsewhere thereby reducing competition and increasing prices.

          • sullivanftw says:

            Now you’re chasing your tail.

            Refiners don’t want to build refineries because they are super expensive to build and maintain because the regulations on a new refinery are outlandish and essentially impossible to follow.

            There’s a reason why refinery capacity has only been increased through existing refinery upgrades—-they are largely grandfathered in.

      • ShruggingGalt says:

        Umm NO.

        California has unique gasoline requirements. They can not import gasoline into the state, so a new refinery in California would help.

        The Northeastern U.S. is going to be feeling the refinery issue in the next few years as well – companies are walking away from the old ones because they won’t be able to recoup the costs of modernization and current environmental standards.

        Unless Delta decides to sell gasoline rather than Avgas.

      • Libertas says:

        I am a middle-aged man, and there hasn’t been a new oil refinery built in my lifetime.

  4. Cat says:

    Glad I’m not headed to the west coast on my 5,000 mile journey next month…

  5. ReaperRob says:

    Go Gulf Coast! Cheaper gas for me!

  6. Blueskylaw says:

    Looks like Enron is getting in on the gasoline market
    the same way they did with the electricity market.

    • yankinwaoz says:

      I thought the same thing. I’ve heard this song before. Remember the brownouts of the summer of 2001, when Enron was playing games with California’s power grid and blaming it on high temperatures and plants being offline for maintenance?

      Gas here in SoCal jumped 20 cents last week. I don’t see why, except for the trying to get us ready for Memorial Day weekend gouging.

      • StarKillerX says:

        Well I’m not going to cry for California considering how many costs they’ve forced on everyone else in the country.

  7. theconversationalist says:

    They took FIVE of the TWELVE refineries on the west coast offline for “maintenance” at nearly the same time – they’re still out. Only ONE of them was having unexpected problems coming back online due to a prior fire. The other four were completely delay-able “maintenance”. When you take almost 50% of your refining capacity offline right before the summer driving season, it’s pretty clear someone is gaming pricing.

    • TheMansfieldMauler says:

      The other four were completely delay-able “maintenance”.

      Do you have a citation for this? I have no doubt the issues were “maintenance”, but I question if it was delay-able. I’m sure EPA and state regs require certain maint functions to be completed at certain intervals, such as replacing scrubbers, etc. Those aren’t able to be delayed.

      • dootsie says:

        And I’m sure that profits thus far have put off these repairs for as long as possible.
        I just have a hard time believing that oil companies all met and agreed to take their refineries offline at once, because they each would have so much to gain by being the only people operating at full speed while the others are hurt.
        And I have a hard time believing that if it’s that easy to game the prices, that every refinery in America isn’t shut down.

        • theconversationalist says:

          That works if demand is UP, but operating at full speed when overall demand is declining means that supplies will build up and prices will fall, meaning they’ll be refining more gas, but making the same or less net money. I understand why they would want to artificially support pricing by taking capacity offline, I’m just saying it shouldn’t be legal for what is essentially a utility service. I’m not a fan at all nationalization in general, but for something like gas/electricity/water, I can get behind it. The players need to be played.

      • webweazel says:

        Sure. It just seems all a little too “convenient” when you look at it over time. As is every other reason for high gas prices. Oh, what’s his face over in this little bullshit country is sabre-rattling in our direction again. Too much uncertainty! Gotta shoot up the prices! Oh, there’s a storm in the Pacific. Weather problems! Gotta reduce processing in the Gulf. Raise prices! Oh, demand is down for gas. Gotta shut down some refineries for “maintenance”. Raise the prices! An elephant farted on the plains halfway around the world, Gotta raise the prices! They sure do shoot up fast, don’t they? It just never ends. Oil companies MUST have record-breaking profits every single quarter for all eternity. Keep that in mind.

        I am absolutely certain that the refineries that closed down for this supposed maintenance are not run by the guys who have the semi-monthly poker game and meet at the local tavern every Tuesday. Really.

        • TheMansfieldMauler says:

          Well if you use just a little critical thinking, it’s pretty easy to see.

          1. State of CA passes a law requiring refineries to install the SuperPollutionCollector 6000 as of 06/01/2002.

          2. 4 refineries that don’t already have it install the SuperPollutionCollector 6000 in May 2002.

          3. The SuperPollutionCollector 6000 has a useful life of 5 years.

          4. May 2007, 4 refineries shut down to replace their SuperPollutionCollector 6000 units.

          5. May 2012, 4 refineries shut down to replace their SuperPollutionCollector 6000 units.

          6. etc.

          • webweazel says:

            You lay out a good scenario. The only thing is, after all the questionable events and dubious “reasons” over many many many years that have repeatedly come together at the oil companies that always seem to push the price peg higher, I just can’t see it. Do I see conspiracies everywhere in those companies? Absofreakinlutely.

            Record profits, billions, every quarter, yet the government cannot take away their paltry (read: taxpayer paid) subsidy to the oil companies because it will “cost jobs”, sorry, I don’t think so.

    • Marlin says:

      A lot of them were taken off line as there is little demand to keep them going…

      “Valero Energy said it expects more refining capacity to come offline because of weakening fuel demand”

      “U.S. Crude Oil Refining Capacity Near 30-year High”

      • partofme says:

        I’m unsure what you’re arguing for or how your headlines are supposed to support said argument. The article claimed a regional issue and cited shutdowns of refineries. theconversationalist claimed these shutdowns were clearly gaming the system. You’re claiming that demand is going down, so they’re being shut down… which is contrary to the articles thesis that they’re being shut down regardless of demand?

        Also, like I said, I’m not sure how your headlines support your thesis. Your first headline speaks of regional shutdowns… throughout the east. It even highlights the idea that concerns are regional, pointing out a difference between Texas-crude refineries and Louisiana-crude refineries. However, your second headline speaks only of overall national production… showing some regional numbers… but the “near 30 year high” claim is certainly a purely national figure. Even worse, it’s a year old.

        I’m just bloody confused. Care to help an academic out? Maybe start with a specific thesis?

  8. Snapdragon says:

    Well, that explains the $4.45 I saw earlier this week… *sigh* Glad I don’t drive very much.

  9. Warren - aka The Piddler on the Roof says:

    I don’t drive much, but when I do I use this:

    http://gasbuddy.com/

  10. oldtaku says:

    California also has the special ‘summer gas formulation’ which you must start selling starting in May. It’s allegedly cleaner, but not much.

    What it’s really good for is further constraining the supply and keeping prices higher because now you have gas that’s only for California and California can’t use the normal cheaper blend from elsewhere.

    • Whtthfgg says:

      midwest has the same, so thats kind of out the window

    • microcars says:

      that’s the excuse we get in Chicago -”summer blend” or “winter blend”
      Except if you go 100 miles N, S or W the price drops 40-50 cents.

      right about the time the “summer blend” excuse is wearing thin, the “winter blend” comes up on the news.

  11. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    ’cause the East coast is sucked dry, so now onto new suckers?

  12. dourdan says:

    that sounds about right.

    my mother in law is in wisconsin and she is always complaining “its sooooo expensive, it’s 3 dollars!”

    while in san francisco its 4.50 a gallon

  13. dootsie says:

    I heard about this on NPR last night. Two refineries have recently shut down, four are down for repairs. So that doesn’t sound too much like Bee Ess to me.

  14. ilikeboomies says:

    “unexpected maintenance” was the same thing that Enron, and those other energy traders, claimed when energy prices skyrocketed in the early 2000s. And that was a major conspiracy…

  15. theconversationalist says:

    Actually, I was wrong, it’s Five refineries down for maintenance PLUS one having trouble coming back from a fire, so fully 50% of the capacity is taken offline to artificilally boost prices in the West.

    A congressman has called for a fraud investigation now:
    http://tinyurl.com/7knxeac

    • StarKillerX says:

      Funny how Congressmen are real quick to investigate everyone for fraud exempt for Congress itself.

  16. gman863 says:

    Refinery capacity/output has always been a factor in gas prices by region.

    As I recall, most gasoline piplines originating out of the Houson area are mainly routed to the north (Great Plains) and northeast (Ohio Valley/Mid South). The cost of delivering gas by truck to the western states would be cost prohibitive.

    Just remember, gas price krama goes both ways: Just ask Katrina, Rita or Ike how gas jumped by .50-1.00 per gallon when Gulf Coast refineries had to shut down for a few weeks.

  17. Steevo says:

    It’s manipulation.

    Oil closed at $92.81 yesterday but it was $120 a while ago. At that time gasoline was $4, now it’s $4.30 or more in California. What’s wrong with this picture?

    Manipulation. Plain and simple.

    Speculators taking money out of the market and bringing nothing of value at all.

    Buying commodity futures is supposed to provide production capital and incentives to produce those commodities. None of that is needed or being done in energy.

    They are stealing from us all. The government is using this to force us into smaller and smaller cars, into moving closer to work, riding a bike, public transportation or walking.

    But this is a big country. We depend on reasonable energy prices to allow us mobility, the lifestyle that is the envy of the world. We want to be able to go on vacation. To go away for the weekend. To have a boat at the lake and have fun recreation. We don’t want to be stuck on trains. In high rise apartments. In barracks.

    We don’t want it. This is America. Land of the free.

    • consumed says:

      I’d much rather be stuck in trains than the damn highway gridlock that so many cities are plagued with. Since there is seemingly no money to build more roads, it seems that rail transit is one of the only logical alternatives. Get more people like me off the roads who don’t want to be trapped in a car, and into trains and that gives people like YOU more freedom.

      Support high speed rail.

      • Steevo says:

        I love the idea of high speed rail, I just don’t think people who don’t use it should be forced to subsidize it.

        That’s the problem.

        If you had to pay the full cost of building and operating that high speed rail (or low speed, or buses or trolleys for that matter) in your ticket price you’d find that was completely unnecessary.

        People want to use that transportation system but they want others to pay for it. You pay $2 but it costs $15 to run.

        Solve that problem and I’d say build all the high speed rail anyone wants.

        • StarKillerX says:

          The problem with high speed rail, as I see it, is that they are pushing it as a solution everywhere when in fact I think there are very few area where it really makes sense and actually be able to pay for itself, largely because our population is so spread out.

          • Steevo says:

            This is a big country. If this were Lichtenstein it would work out fine, but here, not ever.

        • darklighter says:

          People who don’t use it would still benefit from its existence.

  18. waterboy in Alaska says:

    I filled up this morning, $4.48/gal….stupid gas prices. You’d think it would be cheaper here in Alaska, I mean we drill for the oil here so no/minimal transportation costs….NOPE. Whatever money we Alaskans get back from the state every year for our dividend is pretty much used just to cover the extra cost of fuel here.

  19. shepd says:

    Just stop buying gas. You can do it. You can still drive the car you own right now. Convert it to something else. You have the power to stop the high gas prices. Exercise it.

    • Froggmann says:

      You can’t do that in California. Fuel conversions save for a handful of vehicles (Ford Trucks, Crown Victorias, etc) are illegal due to the C.A.R.B. Unless you spend a ton of money to have them test your converted vehicle you can’t sell the conversion.

      Counter-intuitive, I know. Keep in mind this is the same group up un-elected nutjobs that made equipping your vehicle with more efficient and cleaner emission controls illegal.

  20. Torgonius wants an edit button says:

    Are these base gas prices, or do they inlcude all the taxes as well?

    Here in NJ, the low gas tax means the price we pay per gallon of gas is anywhere from 10-25 cents per gallon less than over the border. The gas itself is probably the same price (within a few cents),

  21. km9v says:

    Gasoline sold in California has to be made in California.

    • pythonspam says:

      No, it just has to be made to CA standards.

      While refineries in the midwest or gulf coast may be able to produce that blend, it is cost-prohibitive to then truck it to california. Of course, no company is going to build a refinery just over the nevada or oregon border, they are going to build it where raw material (a.k.a. crude) is accessible and where the finished product can easily be distributed to wholesalers.

  22. amuro98 says:

    Due to California emission requirements, all gas for California needs to be processed in a different manner, and have extra ethanol and other additives added to it.

    As a result gas has always been more expensive in CA compared to the rest of the US. Always.

    • majortom1981 says:

      I could be wrong but here in NY we have the same gas as california. We have ethanol in our gas to which KILLS my gas milage by 3mpg. If I get gas in say NJ my gas milage goes up by 3mpg.

      I wonder if the ethanol in the gas really helps the environment enough to offsite the loss in MPG.

  23. Gizmosmonster says:

    We paid $4.49 a gallon on Wed in the Seattle, WA area for a rental car, then flew home to Dallas, TX that same day. On the way home from the airport we filled our car up at $3.48 a gallon.

    That is over a dollar a gallon difference!!!

    • BeamMeUp says:

      Yup, it is very high here in Washington State. $4.19 at a service station on the way to work today.

  24. dush says:

    Less infrastructure, less capacity and some refineries went offline in the west. sucks.

  25. kethryvis says:

    i’ve lived in California now for over 20 years, and i have to say, this happens EVERY YEAR at this time. There are *always* “refinery maintenance” windows a month or so before summer starts. So we get a price spike. Then it spikes again when the “summer blend” of gas comes on market, so we basically get two spikes in a two month period, and i’ve never seen prices come down after these so-called maintenance periods.

    Every year, people. Every. Year. And Congress is just *now* picking up on it? Fine detective work there, Peter. Better late than never, but did we really have to wait until we hit over $4 a gallon?

  26. BorkBorkBork says:

    Gas prices near me have been basically steady for a month: $3.84/gal (Vegas) It went up about five cents a few days ago, then returned to 3.84 a few nights later.

    I’m trying to see if I can go a whole month on one tank of gas. So far, I”m on track…

  27. powdered beefmeat says:

    I find it hilarious that the closer you are to the refineries the more expensive the gas is.

  28. scottydog says:

    Two weeks ago I was paying 3.96 at mt local costco and 2 days ago it was up to 4.23.

    • Sweet Revenge says:

      Me too! I was going to buy gas @ Costco on my way home (price was $3.99) but the lines were too long so I decided to wait until the next morning. Big mistake! Price had gone up .14 in the 16 hours between visits. No lines though!

  29. Duke_Newcombe-Making children and adults as fat as pigs says:

    Enron on line two, sir….

    As a Californian, this gameplaying sucks, full stop. Everyone and his brother in a manufacturing vertical has heard of the term “preventative maintenance”-maintenance you know you need to do and plan for.

    Funny, when I heard “maintenance slowdown”, my mind ticked over to “work slowdown”. These folks will be some of the first up against the wall.

  30. bearymore says:

    The same thing happened last time gas prices had skyrocketed. After massive consolidation, the west coast is supplied by a small number of refineries which all seem to go off line for “maintenance” (ironic quotes) when crude costs start to fall. This is classic monopoly gouging.

    There oughta be a law! Oh wait, there is one but it hasn’t been enforced since the Reagan administration.

  31. xrmb says:

    Why am I paying $3.45 in Central VA for over two weeks now? Are we the ones dragging the avg down?

  32. aaron8301 says:

    I’m actually surprised Chris didn’t do just a tad more research on the subject. Most of the reason for Washington and Oregon’s high prices is due to a refinery fire in February. Then early this month, they had expected to get said refinery online so prices started to settle, but then they couldn’t get it online, and prices rose even more.

    https://www.google.com/search?sourceid=chrome&client=ubuntu&channel=cs&ie=UTF-8&q=bp+refinery+blaine#q=bp+refinery+blaine&hl=en&client=ubuntu&hs=aQF&channel=cs&prmd=imvns&source=univ&tbm=nws&tbo=u&sa=X&ei=_f22T865NImWiQLKioCFBw&ved=0CD4QqAIoADAE&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.,cf.osb&fp=c74d0d62829909ec&biw=1359&bih=830

    • theconversationalist says:

      Total BS. What about the other FIVE refineries that were taken offline for regular maintenance that didn’t have to be done now? We’re at 50% capacity because of that.

      Manipulation.

    • Libertas says:

      You should NEVER be surprised.

  33. Scamazon says:

    Riddle me this – Oil exploration and production are up in the US unfortunately the oil companies can make more money selling a majority of that oil overseas that it can in the US. Its all a game run by the oil companies and we are the pawns…

  34. shelman23 says:

    Slowdown? How convienent right about now! Damn my CA self

  35. majortom1981 says:

    Refinery problems is the reason why we have gas price problems in the first place. Nothing to do with oil and how much or little we have.

    The problem is all the not in my backyard people. we have a lack of refinery production in the US and any time a new refinery gets proposed to be built it gets turned down by the Nimby people.

    Also keep in mind some states like NY and california have specific blends like ethanol that have to be put into the gas. So this splits the few refineries even further.

    Do not believe the wee need to drill or make our own oil. ITs a refinery capacity problem . thats why our gas prices are going up in the US. ITs a very rarely covered thing because the oil companies do not want people to know thats why prices are so high.

  36. tiz says:

    Gas is $5.25.2/Gallon here. FML!

    West Coast of Canada, 45 minutes outside of Vancouver. BRUTAL