Hardly unexpected, but most unwelcome: the Golden State has a gasoline problem on its hands. It can't find enough of the liquid gold to hold prices down. Prices across the state are zooming higher, faster than you can saw "wow", and some stations are sitting on the sidelines, refusing to replenish their massive tanks at insane prices.
The cost of replenishing underground tanks has risen an eye-popping 100 cents per gallon, yes $1/gal, just in the last week. A station buying 8000 gallons can expect to shell out $33,840 today (not including tax), up from last week, when the same volume would have cost a measly $25,840 (not including tax). Some station owners, knowing they can't raise prices fast enough, are choosing to sit on the sidelines until the madness is over.
It's a crazy game to play: wholesale prices of gasoline have risen $1/gal in the last week while retail prices have risen just 30c/gal. Station owners are hemorrhaging money by playing this game. They're buying wholesale gas for over $4.75/gal after taxes are added, but in some cases, only selling it for $4.25/gal, a massive loss of money. So what to do instead? Close down, wait out the storm, and hope it doesn't last a long time.
Costco’s outlet in Simi Valley, 40 miles (64 kilometers) northwest of Los Angeles, ran out of regular gasoline yesterday and was selling premium fuel at the price of regular, Jeff Cole, Costco’s vice president of gasoline, said by telephone. The company hasn’t been able to find enough unbranded summer-grade gasoline to keep its stations supplied, he said.
“We’re going to start shutting pumps Friday,” Sam Krikorian, owner of Quality Auto Repair in North Hollywood, said by phone yesterday. “Gas is costing me almost $4.75 a gallon with taxes. There’s no sense in staying open. The profit margins are so low it’s not worth it.”