Stop in for a cup of coffee
Did you read the full article? The explanation is simple.
“A supply crunch from refinery upsets in Los Angeles and San Francisco was contributing to the price uptick – specifically because California has a unique gasoline standard, which means replacements for the production shortfall are harder to come by. Flooding in parts of the Midwest also compounded problems, since it affected ethanol blends and caused distribution disruptions.
Patrick DeHaan, a senior petroleum analyst at GasBuddy, told FOX Business that there are no mysterious factors at play – it is simple supply and demand economics.
“When a refinery in a tight market like the West Coast goes down, knowing few refineries produce California's one-off gasoline mix, is a recipe for a course in Econ 101: supply drops, and demand is inelastic, meaning motorists still need fuel, so prices can soar,” DeHaan explained. “I don't see much/if any manipulation here, this is how markets work.”
DeHaan noted that the effects of refinery, or other, issues will often take weeks to affect drivers.
Fellow GasBuddy senior petroleum analyst Dan McTeague told FOX Business he expects prices to get worse for Golden State drivers before they get better. McTeague said they could rise by another 10 cents – assuming refineries are able to iron out their issues, which is far from certain.”