California Situation a Warning to Prepare for Higher Fuel Prices…
Per the normal election-year silly season, gas prices have miraculously plunged only two weeks out from the election. Ignore this good news. Energy prices are headed higher.
While price pressure is off voters for the moment, you should get ready for post-election price spikes. This Executive Bulletin reveals a number of resources to safeguard your wallet against theft by two types of malicious people – government agents armed with overbearing regulations and street thugs armed with knives, guns, or just ordinary tools.
A per-gallon price of $4.59 is now considered a great find on gasoline in California, as reported by our “boots on the ground” West Coast reporter. And that’s the cash price for regular in a Los Angeles suburb. Using the convenience of plastic credit, he had the, um, pleasure of paying $4.65 at the same station. That’s $102.30 for a 22-gallon fill up!
Just a few days earlier, many stations were getting more than $5.00 a gallon. One place went so far as to command $6 per gallon! That is the true wave of the future.
Although California Is a Special Case at the Moment, We All Need to Beware the Creeping Cost of Fuel
The average cost of regular in the nation was just $1.93 back in January 2009, according to the U.S. Bureau of Labor Statistics (BLS). The BLS recently reported regular averaged $3.71 in August 2012, and today, AAA estimates regular has risen further to an average $3.82 per gallon – virtually double the 2009 price. More to the point, retail pump prices have risen in every state compared to last year.
Refilling the tank is eating into everyone’s buying power, not just Californians. Likewise, non-stop fiat currency unit creation, like Quantitative Easing 3, will most likely push the average nominal cost of gas (and other commodities) even higher, despite temporary pullbacks.
In a previous Executive Bulletin, I revealed 13 simple methods to raise your vehicle’s mpg by 22% to 48%. These suggestions even help boost the efficiency of cars, trucks, 4x4s, and RVs! Now is probably a good time to review the list and keep more of your money in your pocket rather than blown out your exhaust.
It’s the Regulations, Stupid…
Political personalities rarely miss the opportunity to grandstand on sudden price spikes. U.S. Senator Dianne Feinstein (D-CA) fired off a stern letter to Federal Trade Commission (FTC) chairman Jon Leibowitz, asking for an immediate investigation into possible price manipulation.
“California’s consumers are all too familiar with energy price spikes which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and manipulative trading activity, ” she’s quoted as saying in USA Today.
It should be clear she’s not suggesting that government regulation and its resulting market distortions, led to the current problem! As it is, environmental regulations force Californian drivers to buy gasoline formulated specifically for their state. Only 13 currently refineries exist which can produce the special gasoline blend legal for sale in California.
In other words, if disruptions occur at any of these refineries (like it has now), it immediately impacts supply and gas prices, because they can’t go to the open market and buy more gas to meet demand.
In a few weeks’ span, a fire knocked out a Chevron refining plant near San Francisco, a pipeline supplying refineries in Northern California was shut down due to contamination, and an Exxon Mobil refinery near Los Angeles went dark when a blackout cut its electricity.
One could blame Murphy’s Law for this “perfect storm,” but this scenario should not have caught regulators by surprise. Back in 1996, when California first transitioned to its special fuel, accidents damaged three refineries in the state, creating a similar supply crisis. While politicians make unsubstantiated charges of price gouging, over regulation leaves us all highly vulnerable to market disruptions.
Indeed, even if “price manipulation” (in reality, of course, the price moves are reflections of supply and demand) is taking place, regulation keeps California hostage and hinders its ability to fight back with the big stick of the free market, because it can’t buy more gas from other states. Staying prepared and less dependent on government regulators, state or federal, is a good move.
Nationally, political machinations over-regulate energy production from oil sands, Marcellus shale natural gas reserves, and other sources of petrochemicals and technologies used to extract them.
If your property allows it, you can consider installing a fuel holding tank. This can help you even out price and supply volatility in your area. For details, take a look at our exclusive Ultimate Self-Reliance Mega-Manual.
With Rising Fuel Costs, Look Out for
Thieves Trying to Steal Your Gas
Due to the high cost of fuel in California, a few thieves decided to rob some from one gas station. The thieves rolled into the gas station when it was closed at night. They siphoned 1,153 gallons of gas worth more than $4,600 in just three nights. Police put a stop to them, but they’re still not sure how they sucked the gas out of the pumps and into a holding tank in their truck.
As retail prices for fuel, metal, and more rise, theft becomes a problem for everyone. A full tank of gas in your vehicle all of a sudden becomes a tasty target for a crook looking for an easy score. Don’t be an easy mark! Get a locking gas cap and avoid parking in the “wrong” neighborhood, which could even include a church parking lot in some cities.
It’s a sad reality that the price of energy is driven less and less by supply and demand and more by government intervention. Gasoline is refined from a naturally occurring commodity that gushes out of the ground in vast quantities if you just drill a hole in the right place. The fact that it costs $4, $5, or $6 a gallon ought to be a clamoring alarm to every American to resist, protest, and oppose government manipulation of free markets.
Look over this past issue of our Executive Bulletin and see the quick and cheap steps to protect the fuel in your tank from getting drained, as well as your tires, wheels, and catalytic converter (full of platinum and other precious metals).