I came across an interesting article outlining California’s gas woes. It goes into great detail as to why California’s gas prices are so much higher than the rest of the country’s. Furthermore, it explains why gas costs more in the summer than in the winter.
It seems that the summer heat affects the way gas behaves and the way it pollutes. This means gas companies have to create a special “summer blend” that costs more to refine.
Becuase California has stricter pollution standards and the recent switch away from MTBE to ethanol the state is experiencing increased gas prices as the refiners perfect their ethanol based blends.
Questions are being raised about price gouging, as can be expected when gas prices are 40 cents higher than the rest of the US. It seems a few of the refiners have already perfected the blend and cut costs, but since many haven’t prices remain high, which, in turn, results in huge profits for the ones who have perfected the new ethanol blend. Yet another day of craziness in the free market oil trade.