The Spike in the Price of Gasoline in California: the Calm Before the Storm

There are stories that the recent spike in the price of gasoline in California will moderate.

We will see. New regulations affecting gasoline went into effect in November.  That was last month. Oil companies have already warned they will pass the costs to consumers.

I've opined that the recent spike prepared consumers for the potential shock in November. Consumers, state government, and the oil industry have a new data point concerning what consumers are willing and able to pay in California. There were no riots in the streets, no lawsuits, just a speech by Governor Brown allowing a hastier transition to winter-blend gasoline. 

A Boston Consulting Group study estimates the cost of gasoline would increase by $2.70/gallon if all of California's 2006 global warming law were implemented. Much of that increase could come by 2015.

For more, click here.

Random comment: in business, there is something know as the "moat." The fourteen refineries in California are protected by a huge moat due to state regulations. During the last 20 years the moat has widened: four refineries in the state have shut down rather than invest in expensive upgredes to comply with fuel regulations. -- WSJ at the link.