In the last few years, California motorists have experienced significant short-term increases, or spikes in the price of gasoline. The states gasoline refineries are operating at near maximum production, and when an unplanned refinery outage occurs, especially when gasoline inventories are low, the price of gasoline can spike. Outages drive the price higher because of the temporary imbalance between supply and demand. The price increase required to restore this balance can be significant due to a very low demand response--California motorists have little alternative to gasoline use in the short run. Gasoline sold in California requires a unique, less-polluting formulation. This means that sources of supply outside the state are limited. Since California is not connected by pipeline to major refinery centers elsewhere in the country, imported gasoline must be brought in by marine tanker. In the event of an in-state supply disruption, locating and importing replacement gasoline can take from two to six weeks. Prices often remain at high levels until shortly before these additional supplies arrive.


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    Title :

    Feasibility of a Strategic Fuel Reserve in California. Commission Report


    Publication date :

    2003


    Size :

    28 pages


    Type of media :

    Report


    Type of material :

    No indication


    Language :

    English





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