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Gas Price Spike

 

Last updated 7/28/2015 at 10:19am

Southern Californian motorists have been happily filling their tanks with gas for less than $3.20 a gallon. On Tuesday July. 14, they paid an average of 64.9 cents more for that same gallon, the result of the worst price spike seen since 2012.

Despite the U.S. average price remaining about $2.77, local residents saw prices rise an average of 19.5 cents across Riverside County between Monday night and Tuesday morning, according to GasBuddy data.

These dramatic double-digit increases dwarf the 52.7 cent-record for weekly price hikes set in October 2012, when the Chevron refinery in Richmond caught fire.

This spike can be blamed on what experts call a perfect storm of supply and demand. GasBuddy Petroleum Expert Allison Mac explains, "It's basically Economics 101, where there are a lot of people who want something and there's not enough of it. The margin for error at refineries, especially in Southern California, is very small, so when a refinery is completely down for such a long time, it gets very shaky."

"Right now, gas production is even with consumption," Mac said, "a fact that makes the market act very nervously". "It's not like our water issue, where we keep using water and there isn't any more being made," she said. "We're just not producing more than we need. ... We're not comfortable."

Record numbers took to the road for Memorial and Independence days, exacerbating the problem as motorists took advantage of the past three months' low gas prices. The Energy Information Administration report released Wednesday July. 8, revealed that the state wasn't in as good of a position as prices were reflecting which leaves travellers trying to enjoy their summer, now facing significantly more expensive road trips causing some residents to ask Gov. Jerry Brown, for temporary fuel waivers to ease the strain on their pockets.

Although prices could rise another 10 to 25 cents, there is hope in sight. A large cargo shipment of fuel arriving at the end of July, should see prices begin their slow decline.

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