Why Are West Coast Prices For Diesel Fuel So Volatile

?Why Are West Coast Prices For Diesel Fuel So Volatile?
Depending on part of the country you reside
in, prices of diesel fuel can be extremely
volatile. No where is this more true then on the West Coast. The prices of diesel fuel on the West Coast tend to increase and decrease at greater rates and costs more then in other parts of the country. There are several reasons for this.
In California, one of the primary reasons for comparatively higher gas prices has to do with supply issues. Higher taxation on diesel fuel also has a negative impact (for drivers) on diesel fuel pieces. Diesel fuel in California has a state, use and local taxes of 7.25 %. Add to this, 24.4 cents per gallon for the Federal excise tax, and 18 cents state tax. The state of Washington is also notorious for having high and volatile fuel prices. They have a state tax of 34 cents, which is one of the largest in the United States.
Diesel fuel cost is also higher in this part of the country due to
the lack of nearby supply sources. Most of the West Coast refineries are in California. In order for prices to be stable and as low as possible, these Californian refineries have to be running at full capacity just to meet the demands of California.
Trying to provide the nearby states with the fuel that they need can be very difficult. If there are any problems with the California refineries or any of the 36 refineries on the West Coast, this makes the situation extremely volatile. Because the amount of fuel available shrinks, the prices go up.
Besides not having enough local refineries, the distance to obtain diesel fuel from other sources in the United States can also cost problems Californians will have to pay for the shipment of fuel the Gulf cost or from sources outside the country.
When company is shipped from another country or from another part of the same country, fuel surcharges will be added to the price of the fuel. Fuel carriers will include transportation surcharges. These surcharges can be whatever the transportation decides they are going to be. There is no federal oversight of surcharges. Therefore, transportation companies can really stick it to states that need emergency fuel. Of course, these increased costs will be transferred to the consumer.
Individuals on the West Cost who drive vehicles with diesel engines have not doubt faced the effects of higher and more volatile gas prices more then individuals in other parts of the country. Many Western states have expensive taxes. Along with the higher then average state tax, the strong dependence of a small number of refineries mean that everything has to go perfectly so that everyone can have access to affordable fuel.
Things do not always work as they should and the costs to bring in fuel from outside of the country or from different parts of the United States costs money. These costs must be absorbed by the consumer. Fuel transportation companies will charge a premium to ship diesel fuel from other parts of the country, raising the prices at the pump.