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Surprise, surprise! Gasoline already up 10 cents a gallon

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POSTED August 9, 2012 12:20 a.m.

You’d think Chevron would have the decency to at least be subtle.

The gas price at a Chevron-owned station in Manteca was $3.95 for a gallon for unleaded gasoline at 1 a.m. Wednesday. Nine hours later it had shot up a full 10 cents a gallon.

Yes, I get that Chevron’s Richmond refinery has been shut down by a fire that started Monday. Yes, I understand it produces 16 percent of California’s reformulated gasoline supplies. And, yes, there is the question of supply and demand.

But in this case it is next to impossible for demand to have outstripped supply that quick even with inventories in the West Coast being relatively low. What we are experiencing is a pre-emptive increase in price before demand squeezes supplies.

If you doubt that, did you see any gas stations run out of gas? Instead, Chevron jacked up the prices while there are still supplies in the pipeline to meet demand.

Chevron can run all the “we care too” fuzzy advertising they want but when push comes to shove the mammoth oil company appears to be a master manipulator of prices.

You’ve probably noticed during previous “shortages” how the gas already in the underground tanks at stations goes up even though it was refined before the “shortage” or jump in oil prices. The price hike happens - just as it did Wednesday - literally overnight. Yet when there is sudden excessive refining capacity or an oil glut, the price at the pump doesn’t come down right away. That’s because they are still charging based on market conditions when they were refining the gasoline.

Prices go up instantly the second oil companies can say there is a drop in capacity with demand still strong but when prices drop off on the cost of oil or there is excess production in refineries it can take weeks for that price drop to reach the consumer.

Experts on Tuesday were predicting a minimum increase of 10 cents a gallon to as high as $1 a gallon jump depending upon how long it takes Chevron to get the refinery back in operation.

Based on California gasoline consumption, each 10 cent jump represents $250,000 a day more out of consumers’ pockets.

It also represents $18,000 more a day in state sales taxes even though everyone is buying the same amount of gas.

Again, where is the shortage? Anyone see gas lines? And in case you’re wondering, just because a gas station has a Chevron logo doesn’t mean they’re necessarily selling you gasoline that the company refined. All of the big oil companies are interconnected when it comes to oil production and distribution which is why when Chevron gas goes up at the pump so does the gas at the pump for other brands.

Perhaps whichever California agency is empowered to fine Chevron for releasing a lot of solid particulates into the air via the fire should slap a fine on them for the mishap that’s the equivalent of twice the amount per day that oil companies are able to milk out of the disruption of the gas supply.

That way Chevron - and their cohorts in the oil business -  don’t profit off of their mistakes, accidents or not.



This column is the opinion of managing editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209-249-3519.

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