California and Oil

I know we talked about it but could someone please explain how the oil refiners end up the culprit for high prices at the pump? I did my best to find the actual argument for this but failed.

California to have highest gas prices in nation when new gas tax kicks in July 1

"The state of California is investigating now the high cost of gas in this state... I know what it is because I look at the oil refineries profit reports. It's gouging. When the oil refineries are making more off California gasoline than they make anywhere in the rest of the nation, we know that that profit is gouging," Court added.

 

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(edited)

I can also tell you, having been involved in stations in ca, and in Florida. The total cost here is absolutely different in terms of real estate and operations. in Florida, 1-2 cent fuel margins are the norm. In California, even your ampm arco is making 25 cents a gallon. That's a minimum of what it takes here to remain in operation and compliant with the mortgage paid. 

In Florida, $1.5m gets you a great store. Like a racetrack. New, big, beautiful. 

In California, it costs $1m to put tanks and pumps in the ground. A decent station In California is going to run you around $3.5m minimum in comparison. Minimum. 

My pg&e electric bill, $4000-6000 monthly. In Florida, about 800-1200. 

I had a gentleman apply Thursday requesting $18.50 to start as a cashier. Now apply workers comp etc to that. Which is at 17% here. Pumps have to be upgraded every 10-12  years. I just spent $160,000 on some. $30,000 additional to install. Permits and compliance licenses run about $75-100k a year. Need I go on? 

Gavin Newsom is a twerp and so are his cronies. They know exactly why gas is so expensive here. That rigorous extent exists from the origin of the crude in this state, and all the way to it and all the way into your tank. 

 

So, without going into excruciating detail, I know at least for gas stations, they run in a 5-6% on the low end, to an 8-10% cap rate on the high end. So if these baboons running this show would shell out millions, and the liability for any less return on their money, then the citizens of this state are less intelligent than I ever thought. Because we all know they are doing a lot less work for a whole lot more gain than that. 

 

 

As for refining margins, I couldnt say. Look at crack spreads and thay will shed insight. I can tell you I pay 8 cents/gal freight as well on my fuel to have it delivered. 

 

I'm sure guys like shellman and wrs would scoff at returns of that rate. 

Edited by J.mo
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(edited)

But I'd place a huge bet. Huge. that these solar companies are making well beyond 6% on their solar installations. I know this because I've gathered a few quotes. However, this seems to be a non issue. 

(6% gross margin assuming 25 cpg on $4/gal gas)

Edited by J.mo
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I would bet that Marina's embedded link has a clue...taxes.

Does anyone know, roughly, what percentage of the cost of a gallon of gasoline in California goes to taxes as opposed to other States in the Union?

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25 minutes ago, Douglas Buckland said:

I would bet that Marina's embedded link has a clue...taxes.

Does anyone know, roughly, what percentage of the cost of a gallon of gasoline in California goes to taxes as opposed to other States in the Union?

Looks like California has the 2nd highest state tax rate on gasoline in the U.S.  Full list in the link:

How much gas tax adds to cost of filling up your car in every state

Highest state taxes on gasoline:

2. California

• State gas tax: 55.5 cents per gallon.
• Gas price as of mid-Jan. 2019: $3.29 per gallon. (the highest)
• State taxes as pct. of gas price: 16.9 percent (9th highest)
• Annual miles traveled per driver:12,982 (15th lowest)

1. Pennsylvania

• State gas tax: 58.7 cents per gallon.
• Gas price as of mid-Jan. 2019: $2.48 per gallon. (15th highest)
• State taxes as pct. of gas price: 23.7 percent (the highest)
• Annual miles traveled per driver: 11,266 (5th lowest)

 

Lowest state taxes on gasolines:

50. Alaska

• State gas tax: 14.7 cents per gallon.
• Gas price as of mid-Jan. 2019: $2.98 per gallon. (4th highest)
• State taxes as pct. of gas price: 4.9 percent (the lowest)
• Annual miles traveled per driver: 9,837 (the lowest)

 

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So the State with the highest percentage tax has a much lower price per gallon.

I wonder if someone out there knows what actually goes into the cost of gasoline (cost components) in the Land of Fruits & Nuts (California). It would be interesting.

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1 hour ago, Douglas Buckland said:

So the State with the highest percentage tax has a much lower price per gallon.

I wonder if someone out there knows what actually goes into the cost of gasoline (cost components) in the Land of Fruits & Nuts (California). It would be interesting.

Read the thread.... 🙄    from J. Mo... it is rather obvious. 

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Perhaps I'm just dull, but I do not see where that answers the question I asked.

If the price per gallon in California is $3.29/gallon, and state tax is 55.5 cents per gallon, how is the other $2.73.5 allocated?

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8 hours ago, Marina Schwarz said:

I know we talked about it but could someone please explain how the oil refiners end up the culprit for high prices at the pump? I did my best to find the actual argument for this but failed.

California to have highest gas prices in nation when new gas tax kicks in July 1

"The state of California is investigating now the high cost of gas in this state... I know what it is because I look at the oil refineries profit reports. It's gouging. When the oil refineries are making more off California gasoline than they make anywhere in the rest of the nation, we know that that profit is gouging," Court added.

 

I've never looked at the crack spread for gasoline sold in California. However, I do know that the higher cost is partly because of regulation on the way it's refined, due to stringent standards on emissions. https://www.arb.ca.gov/fuels/gasoline/gasoline.htm

Thus, the refining break-even cost is much higher than conventional gasoline sold in other states.

Edited by Matthew w

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(edited)

38 minutes ago, Douglas Buckland said:

Perhaps I'm just dull, but I do not see where that answers the question I asked.

If the price per gallon in California is $3.29/gallon, and state tax is 55.5 cents per gallon, how is the other $2.73.5 allocated?

I'll show you a method. When calculating my margins, I take the retail price and divide by 1.025%. This removes the sales tax. Then subtract 65 cents for the other taxes. Then subtract my full net cost to produce the margin. 

So, at current prices, 75 cents off the top for all state and federal taxes. Then 8 cents added on freight. 2.5 cents added on additional quarterly taxes called underground storage fees to each gallon pumped. Add in a 25 cent margin. We are roughly $1.10, plus .25 =$1.35 . Then subtract if you'd like further, as 25 cents is a GROSS margin. Card fees. Roughly 2.5% of retail price. Another 10 cents at retail $4. Add in +3 cents over rack. You end with gasoline base price. 

The rest is the base cost of the gasoline from the rack. As to how they end up at their price, I'm sure theres a base calculation as well, however I do not know it. 

 

 

Edited by J.mo
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I am SOOOOO shocked at the cost of gasoline in California.....LMOA. All those tighter regs di ABSOLUTELY NOTHING to the cost of making gas for California, did it? When they made these regulations, did anybody even BOTHER to ask how much more it would be costing for the suppliers to be able to meet those regulations? Probably someone in the background was trying to tell everyone, but of course, no one listened......

They need to shut up and lie quietly in the bed they have made.

Maybe if you weren't harboring illegal aliens and letting them live there without paying their fair share of the burden, the state wouldn't be levying such a high tax burden on it's citizens. 

Hey California, do the rest of us a favor and shut up about the cost of everything in your state. MADE YOUR BED!! LIE IN IT QUIETLY NOW.....

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