Payam Javan: The’reverse limbo’ question of “How high can you go, setting new records every day?” has replaced fuel sticker shock.
Gas prices, from crude oil to refining to the gas station, are a major concern, particularly in the Bay Area. Is it difficult to use the pump? Yes, absolutely.
Regular is currently $4.82 per gallon in the Bay Area, up from $4.70 a week ago, $4.62 a month ago, and a buck and a half higher than a year ago.
Californians presently spend 30 cents per gallon more than the average state, according to UC Berkeley Haas energy economist Severin Borenstein, which may be unconstitutional.
“California needs to dig into this and find out what’s happening and the state government just hasn’t seemed interested in digging into it,” said Professor Borenstein.
The OPEC oil cartel has propelled crude oil back up to $80 a barrel since it hit a pandemic low of around $30 a barrel.
“And the extra $50 per barrel means another $1.25 or so on our price at the pump,” said Borenstein.
Ridesharing drivers take a huge hit. “When the price of gasoline goes up a dollar or two per gallon, they see that personally in their personal income,” said Borenstein.
Here’s what one rideshare driver told us in June when costs were significantly lower than they are now. “I pay for gas, $50 a day in gasoline. That’s why a lot of drivers, they don’t want to keep driving, that’s why we are short of drivers,” Hector Castellanos, a rideshare driver, said
It’s a problem for companies with large fleets of cars and trucks. Bay Cities Produce, for example, has a large fleet of delivery trucks. “Our fuel prices just the last year, 14 months have gone up 25%. It’s hurt my distance. I cannot expand my growth with the cost of the equipment and the fuel the way it is now,” Bay Cities Produce’s president, Steve DelMasso, stated.
Airlines pay far more for gasoline, but they must pay to fly, and they may and will raise prices, particularly when demand is high. “But they also got a huge bailout payment from the government. So, the airlines actually came through this overall OK,” Borenstein stated.
Rail and ocean shipping is very effective in transporting large amounts of goods with minimal financial impact. However, the price they charge shippers has increased by three to ten times, and you are the one who is paying for it.