Skip to main content

Reality check: $100 gasoline tank refill returns to California

With gasoline pump price crossing the $4 per gallon mark in southern California, is it just a matter of time before the U.S. is looking down the barrel of a $5 per gallon financial trashing? EV and FCEV manufacturers are counting on it.

Join us...    

Like so many long-term financial impacting decisions based on media-driven tripe, that full-sized gasoline or diesel fueled car or truck you purchased last fall, is about to bite you where it hurts, your pocket book.

As Monday’s news reports that average gasoline pump prices in southern California just crossed the $4 per gallon mark, we’re reminded of subject related reports, just a month or so ago promising the auto buying public that the gallon pump price of gasoline would settle well bellow $3 for the ballance of 2015, and possibly carry into mid 2016. looking to the numbers, those reports may have been B.S. in your region.

According to the Fed, the pump price of gasoline does not influence your car-buying decision

Greater profits are realized for auto manufacturers in SUV, and light truck sales: With Chrysler, G.M. and Ford-built light, yet full sized, and more often than not extended cab pickup trucks and SUVs leading the new-car buying resurgence in the U.S., hundreds of thousands of new, and used car buyers, those that were convinced that purchasing a full-sized, gasoline or diesel fueled vehicle made “Good” financial sense when factoring in historic-low fuel prices, and the higher initial purchase cost of hybrid technology, take note; you’ve been played, and--you’re about to be financially impacted by the cost of rising fuel..

Uptrend began in February 2015

Call me an alarmist if you will. Just this morning I received a text message alert from an associate that manages a trucking distribution center in Fontana Ca. Diesel fuel pricing in his neck of the woods approached $3.50 PG, with regular gasoline reaching $4.00. He believe s the world's coming to an end. Yes, we’re in the middle of the summer driving season, yet much of the nation has witnessed a slight downtrend in the average pump price since July 1.

Torque News predicted less than 60 days ago that escalating fuel prices would continue; so what’s up?

Looking to the numbers, we find that an uptrend in the retail price of gasoline traces its beginning to the first quarter of 2015, specifically the month of February. In the Pacific Northwest, gasoline pump price has hovered around the $3.00 mark, with spikes approaching $3.28, or so. Our associates on the east coast report regular gasoline pricing below $3.00, with diesel #2 slightly higher.

Knee Jerk panic-trade-reaction triggers west coast fuel uptick

What’s it like to wake up Monday morning to an average $.28 per gallon fuel price uptick? I suppose that depends on what you’re driving, the length of your commute and the size of your fuel tank.

Hey, for my truck and van driving friends that rely on a heavy duty truck for work-duty, so be it, whataya gonna do? The latest round in gasoline price uptick is attributed to a “Panic” unleaded fuel options buy initiated by gasoline speculators who are betting that current reserve supplies will not meet summer driving season demand; all because gasoline imports dropped to zero last month. Personally,I’ll go with this guy’s prediction as to market stabilization.

This contract-long-buy-play is based on the depletion of a million barrel reserve. At the current rate of use, a 10 day supply for the largest automotive market in the United States.

Will higher fuel prices increase EV and gasoline hybrid demand?

Now you’re picking up on my drift. Every major automotive manufacturer is expanding fuel cell hybrid, plug in hybrid, or stand-alone electric vehicle (EV) development and subsequent sales; if not this year, no later than 2018; and the oil industry knows it!

Actually, the supply of crude oil and gasoline derivatives is secondary to the development of near zero, or zero particulate emissions as the industry approaches the C.A.R.B. mandated 2022 drop dead date for compliance in the California; the rest of the nation will follow.

Two things will happen here: Looking to the numbers, we discover an overall downtrend in consumer demand and subsequent burning of oil distillates

Note: due to the much higher average MPG of today’s vehicles, the daily (Californian processed) usage of unleaded gasoline in California is down by no less than 40% in 8 years. Producers, refiners and distributors of gasoline and diesel fuel will attempt to maximize profits (or at the least recover them) through timed retail price increases, news-driven speculative contract option trends, and as demonstrated in this latest spike, reducing reserve stockpiles during peak driving season, cold weather episodes and multiple refinery shutdowns, all in a concerted effort to buoy retail pump price.

When the proverbial smoke clears, EV and FCEV will dominate the market

Don’t cry for the oil industry, actually a very small percentage of crude is processed into fuel distillates. Asphalt, Fertilizers, medicines, plastics, clothing, that’s that short list. Big oil will survive without the internal combustion gasoline fueled engine. Electric vehicles and fuel cell generated electric vehicles will power the commercial, private and public transportation of the future. In the mean time, pull out your cash, debit or credit card.

Gasoline has been king for over 100 years

We’ll all be paying for the transition from internal combustion I.C. engines to electric powered vehicles like this one. In speaking with American Honda Motors. Kia and Toyota, the logical path to a zero emissions driving future is either a plug in electric, or hydrogen fuel cell generated electric vehicle. All players anticipate on this field anticipate an explosion in demand for this technology, and along with autonomous driving systems, believe their arrival to be much sooner than most buyers anticipate. As mandated by C.A.R.B.legislation, by the year 2030, 75% of all new cars on California roads will be electric.

Join us...    


James (not verified)    July 16, 2015 - 8:02PM

Your price increase at the pump analysts is lacking facts about the industry and diliberly bias . Laws that prevent refineries from upgrading to the latest cleanest, most efficient equipment is the reason for the reserve shortfalls . Add to the fact that new refineries are almost impossible to build. Presto supply shortage. Add in all the seasonal blends and you get supply constraints

Parks McCants    July 16, 2015 - 9:26PM

In reply to by James (not verified)

Welcome James.True enough James. However, that factoid has very little to nothing to do with unregulated world-wide unleaded gasoline, futures and contracts speculation. 3 months ago, the reserve was high enough to justify the short-sale of May , June and July contracts. It was at that time that west coast refiners based on the so-called-glut in the reserve,rolled back import orders. In the meantime, the U.S., specifically gulf and west coast refineries continue to export 55% of the world's automotive diesel supply. As to the building of new refineries... True enough, it's not going to happen in Los Angeles, Long Beach, Orange, San Diego or Santa Barbara counties. But then again, it never has. When I WORKED at El Segundo for Standard Oil back in the day, the refineries were in disrepair. The reason given at that time was the same ones offered today. The way I see it: The internal combustion engine is on its way out. And the first market for it to exit will be the largest, Los Angeles. Note: Today, the average price of unleaded regular in L.A. Metro is $3.85, .30 c lower than a year earlier. Yes James, it's the environmental protection thing. I don't know about you, but when I was a kid growing up south of L.A. in Seal Beach, Ca, I couldn't breath at night; but those refinery methane torches along the 405 freeway sure where pretty! take care.

JeffS (not verified)    August 3, 2015 - 10:23AM

ABSOLUTELY right Parks. The writing has been on the wall for Years. The days of Hi-Po Gas engines
are truly numbered. As a matter of fact, the entire, "Energy" fossil fuel culture will be changing and probably at a faster rate than most imagine. There is much more to the, "Debate" going on than the price at the pump. Technology to replace our, ,"status quo" methods of producing energy is being researched and developed at a feverish pitch across the board. Even the BIG oil companies are making REAL investments, (as opposed to the token investments they have been making for decades) in pursuit of developing alternative energy sources. Just as you point out the car Mfgs. are as well. THAT in of itself speaks volumes as to where the future of energy is headed, it is inevitable. Now as to how quickly the ultimate changes will take effect, at this stage is anyone's guess. It wouldn't surprise me in the least if the next generation sees a completely different energy landscape than what we have today, within their lifetime. Elon Musk might have been/is onto something after all.

Parks McCants    August 4, 2015 - 2:13PM

In reply to by JeffS (not verified)

Yes Jeff, Elon Musk is positioning self and company to dominate the world EV battery module market. The Tesla lineup will be (eventually) sold off to a major automotive manufacturer. Musk's next billion $ or so will be generated through is GIGA factory network. This is huge,, and of course, government subsidized; as has been every major change in mass transportation since the age of the first transcontinental railroad. Take care.

JeffS (not verified)    August 4, 2015 - 5:40PM

In reply to by Parks McCants

Just a word or two about , "Government" subsidies. Just like very other red blooded American I find them to be a double edged sword. When the Government subsidizes studies to record the flow rate of ketchup or studying Mountain lions running on treadmills, or the effect of Swedish massage on rabbits, I find it infuriating. However when the government decides to subsidized Tesla for research, or any other company involved in, "alternative energy", or subsidizes offered to those who purchase EV vehicles or upgrade their homes to being more energy efficient, or subsidizes to revitalize our inner cities and education for the less fortunate, or to address our rapidly decaying infrastructure, those subsidizes in my mind are Tax dollars well spent. So while some view "Government" subsidizes of any kind as a waste, a closer look reveals, that like all things in Government, there is both, "Good and sensible and practical" and then there is, "Ludicrous, wasteful and borderline criminal". Now if we can just find a way to root out the ridiculous, maybe we can start concentrating on fixing America both here and abroad and for every hard working American who deserves better from our Government which is in place to serve the American people and not the other way around. The American people as a whole have just become too complacent, we need to get fired up again an let our Politicians know, in no uncertain terms, "We are just fed up and not gonna take it anymore". Sorry for the Rant, but I Love this country, more so the hard working everyday Joes and Josephines that make up this country, we should DEMAND better from our Government. We still live in a Democracy, but that only works if each of us as individuals take a pro active approach, educate ourselves to that which really matters, and MAKE our voices be heard, as opposed to letting our Politicians lead us like Lambs to slaughter. That is an INDIVIDUAL responsibility we all have to start taking a might more seriously if we hope to maintain the Freedoms this country affords. We are still the BEST Country this world has ever known LET'S KEEP IT THAT WAY. I know not quite the forum, this is an Auto Forum, but much of the above relates directly to which direction the Auto industry will be headed.

Tom Thumb (not verified)    August 5, 2015 - 10:21PM

The cheapest RUG in San Diego is 3.69 The cheapest diesel is 2.79.

It would seem that if you wanted to save money at the pump driving a diesel car is the way to go. 90 cents cheaper per gallon for a fuel that has 30 percent more energy per gallon than gasoline is one heck of a deal.

Parks McCants    August 6, 2015 - 10:47AM

Good morning Tom. That's an interesting price change for automotive diesel. Its been priced higher than unleaded gasoline on the west coast for the better part of 10 years. I do do like D.I. engine technology. Take care and thank you for the price report.