22 Aug 2014
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What the Heck is Up With These Gas Prices?

'Up' being the operative word. What's behind the steep overnight price hikes?

What the Heck is Up With These Gas Prices?

If you're like me, when you drove past the first gas station on your route Thursday morning, you blinked and rubbed your eyes, thinking, "I must be hallucinating."

Unfortunately, we weren't - gas prices really did go up an average of 20 cents per gallon from Wednesday night to Thursday morning. Since Thursday, prices are now up nearly 50 cents per gallon, and are teetering dangerously on the edge of $5 a gallon.

So, what's behind it?

After watching CNN religiously over the past few days and doing hours of online research, trying to find some sort of explanation, I've come across two possible explanations.

1) The quietest oil refinery fire in history - It's astounding to me how little news coverage an oil refinery fire in Baytown, Texas (east of Houston) that took place last Wednesday, Oct. 3 is receiving. The refinery - one of Exxon Mobil's - is reportedly one of the largest in the world, and certainly the nation, pumping out more than 500,000 barrels of oil per day. It took firefighters three-and-a-half hours to extinguish the blaze. 

Reuters reports that, between "Middle East tensions" and the Texas refinery fire, gas prices and oil futures jumped 4 percent overnight. (But, come on - when are there NOT "Middle East tensions?")

2) California and it's 'special blends' - As my East Coast-raised husband likes to say, gas prices are nuts around here because of California "and all it's silly special blends." According to reports by CNN, many gas stations across the state are actually running out of gasoline, as California works to switch production over to its mandatory-by-law "winter blend."

CNN reporter Paul Vercammen said Friday, "If refineries could convert to winter grade fuel sooner - which costs a lot less to produce than the environmentally friendly summer-grade fuel - the prices could be a lot cheaper. But a waiver from the Air Quality Control Board is required. Until then, it's tough times here in California."

Why does California need so many different seasonal blends, when most other states across the country don't feel the need? Seasonal blends....really, is it gas, or Starbucks coffee?

PATCH WANTS TO KNOW - Do you buy into these reasons? Or do you think the sudden price spike is due to something else? How are you easing the pain at the pump these days? Tell us in the comments below.

 

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