Pest Control Services
For the last three years, California drivers have been spending an estimated $3 billion more per year for gasoline. The problem with this is three fold; 1. Experts can’t figure out exactly why?
2. The cost increases are costing the everyday people $1200.00 extra per year to fill up your tank! (There go your Trump tax cuts!)
3. The cost increases for gas are effecting everything consumers buy! (Like food, clothing, housing, etc., etc.!)
California regularly ranks in the top three for retail gas and diesel prices in the nation, usually falling just below Hawaii and tying with Alaska, where prices are, on average, 60 cents higher than the rest of the nation, according to AAA. California drivers are already paying even more at the pump with the 12 cent California gas tax increase and the 23 cent diesel tax increase, an increase that pushes total federal, state and local taxes to approximately $0.72 per gallon for gasoline alone.
Also, as I write this article, there is legislation before the U.S. Congress to increase federal fuel taxes by 25 cents per gallon over 5 years!
But, taxes alone cannot account for California’s high gas prices. In fact, even with the tax increase, Californians are still not the highest taxed when it comes to refined oil. That honor goes to Pennsylvania, where residents pay $0.78 in taxes despite the fact that drivers there are paying about 30 cents less at the pump.
Instead, said UC Berkeley economist Severin Borenstein, “other factors contribute to higher-than-average prices in California: cleaner-burning fuel requirements that drive up the price by approximately 10 cents, low carbon fuel source requirements that add about 4 cents, the state’s cap-and-trade program that contributes another roughly 12 cents, and one other factor — A “MYSTERY SURCHARGE” that experts can’t explain”, though they think it adds another approximately 20 cents per gallon.
“Some of it is probably profiteering by the refineries, but I don’t know how much,” Borenstein said. “Some of it is probably logistical constraints (in the supply chain).”
“In late 2014, the California Energy Commission tasked Borenstein and four other experts to form the Petroleum Market Advisory Committee and determine why gas prices were so high in California. But, not too long after the five members started meeting, an explosion in February 2015 at Exxon Mobile’s refinery in Torrance cause a major disruption to the oil market in California, causing gas prices to spike while the refinery was shut down”.
The committee anticipated the price spike, which often occurs when there is a sudden disruption in supply. But, they didn’t expect prices to remain high, even months afterwards when production levels at the refinery returned to normal. Since that time, Borenstein said prices have remained higher than they would have been before the explosion.
“The question is what changed?” Borenstein said.
The Borenstein’s committee released its findings awhile back and came to this big conclusion? More research is needed to determine if fingers can be pointed at big oil companies possibly colluding to limit supply, and thus, raise prices, or if other factors, such as the cost of transporting or refining the oil, are to blame. Oh well!
But the fuel cost increases are only the tip of that iceberg! Everything we consumers buy are affected, and prices we pay for our daily commodities has and is increasing do to those fuel tax increases. You see, everything we buy is transported by trucks. Those fuel tax increases, 23 cents per gallon of diesel fuel, is being passed on to us.
In our pest control business our trucks travel all over Los Angeles, Orange, San Diego, Riverside and San Bernardino Counties. Just in the past few months are cost per gallon of gas has increased by over 50 cents per gallon. We have also been notified by the suppliers of the products we use that they are going to increases prices to us by 3% to 8% by July. In over 2 decades of being in business we have never experience an increase in supply cost near that amount. Our CPA has been crunching numbers to find out what we as a company have to do to just maintain are margins. She promised she would have the numbers by the end of May.
