Although wholesale gasoline prices have dropped sharply in the Los Angeles market recently, drivers aren't seeing that fully reflected at the pumps.
The wholesale gasoline price in Los Angeles hovered around $2.17 a gallon Friday. Add taxes and other costs, and that would mean a retail price of about $2.77 a gallon.
Yet service stations in the city were charging an average of $3.22 a gallon for self-serve regular Monday.
"The California economy has been penalized by high gas prices for months, and now, when the opportunity comes for a brief window of significantly lower prices, the workings of the market are being frustrated," said energy economist Philip K. Verleger Jr. "The people who own refineries are doing everything they can to prevent (declining wholesale prices) from trickling down to the consumer."
Joseph Sparano, president of the industry trade group Western States Petroleum Assn., acknowledged that "there seems to be a pretty wide gap between wholesale and retail" gasoline prices. But he said that retail prices have begun to come down and the market is working as it should.
"When supply is up and demand is down, the market will seek an outlet so that they come back in balance," Sparano said.
A stockpile of gasoline and diesel fuel on the West Coast is one of the reasons for dropping wholesale prices. The region's 34-million barrels is up more than 20 percent since November.
This comes as demand continues to slump, experts say.
Recent rainy weather in California has kept people off the road in state where residents already have been cutting back on gasoline consumption for more than a year, according to Lynn Westfall, chief economist at San Antonio-based Tesoro Corp., one of California's big refiners.
Meanwhile, drivers are ready for a break.
"It would be nice if we could get under $3," Erika Samora said as she paid $3.179 per gallon on Friday. "All I asked for for Christmas was gas cards."
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Information from: Los Angeles Times, www.latimes.com
The wholesale gasoline price in Los Angeles hovered around $2.17 a gallon Friday. Add taxes and other costs, and that would mean a retail price of about $2.77 a gallon.
Yet service stations in the city were charging an average of $3.22 a gallon for self-serve regular Monday.
"The California economy has been penalized by high gas prices for months, and now, when the opportunity comes for a brief window of significantly lower prices, the workings of the market are being frustrated," said energy economist Philip K. Verleger Jr. "The people who own refineries are doing everything they can to prevent (declining wholesale prices) from trickling down to the consumer."
Joseph Sparano, president of the industry trade group Western States Petroleum Assn., acknowledged that "there seems to be a pretty wide gap between wholesale and retail" gasoline prices. But he said that retail prices have begun to come down and the market is working as it should.
"When supply is up and demand is down, the market will seek an outlet so that they come back in balance," Sparano said.
A stockpile of gasoline and diesel fuel on the West Coast is one of the reasons for dropping wholesale prices. The region's 34-million barrels is up more than 20 percent since November.
This comes as demand continues to slump, experts say.
Recent rainy weather in California has kept people off the road in state where residents already have been cutting back on gasoline consumption for more than a year, according to Lynn Westfall, chief economist at San Antonio-based Tesoro Corp., one of California's big refiners.
Meanwhile, drivers are ready for a break.
"It would be nice if we could get under $3," Erika Samora said as she paid $3.179 per gallon on Friday. "All I asked for for Christmas was gas cards."
___
Information from: Los Angeles Times, www.latimes.com
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