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Breaking down the price of gas

AAA reports the average price of a gallon of gas in the U.S. topped $3.90 a gallon this morning. It's been going up every day for more than 2 weeks.

Tess Vigeland: And just as in Roman times, politics remains bloodsport. Today President Barack Obama accused Republicans of "riding the political wave," blaming him for high gas prices.

But whether the blame is deserved, there's no getting around the political undertow of $4 gas. And that's just an average number, because as we know there's a huge disparity in prices across the country.

Marketplace's Scott Tong of our Sustainability Desk is on the case. Question number one: Why the heck am I paying $4.85 a gallon on Arroyo Blvd. in Pasadena?


Scott Tong: And why am I paying $4.01, Tess, on Robert E. Lee Highway outside Washington? The real question though, is how come Mark Routt in Houston paid a quarter less than that the other day? He’s a consultant at KBC Advanced Technologies.

Mark Routt: It was something like $3.76. Houston has relatively low gasoline prices, because we have a lot of refining capacity where we produce the gasoline.

So part of the issue is location, they’re close to where the gas gets made.

Which is an issue out East. Three key refineries here are: shut down, shut down, and almost shut down.

Jamie Webster at PFC Energy says refiners know that long-term, the U.S. market is shrinking. We drive less, on more efficient cars.

Jamie Webster: Vehicle miles that Americans drive has actually been going down. There isn’t any expectation that is suddenly going to start rising again.

Without locally made gas, Easterners could get more from the Gulf.

Wrong. Because the pipelines are full, and as for tankers, Mark Routt says a law called the Jones Act requires ships to be U.S.-flagged if they sail from one American port to another.

Routt: There just aren’t that many of these ships around. It’s virtually impossible to be moving gasoline from Gulf Coast Houston to New York City.

So East Coast prices, Tess, could start to approach, well, yours on the left coast. And you can thank local gas taxes, and regulations, says Phil Flynn at PFG Best.

Phil Flynn: When you think green, you think California. They’re a leader whether it comes to refineries, whether it comes to drilling, when it comes to smog. California’s been a leader. And they pay for it. They do pay through the nose for it.

So this summer, Tess, road trip -- you and I will meet up with my brother in Colorado Springs: $3.49 a gallon. Jerk.

In Washington, I’m Scott Tong for Marketplace.

About the author

Scott Tong is a correspondent for Marketplace’s sustainability desk, with a focus on energy, environment, resources, climate, supply chain and the global economy.
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What no-one is making light of, is the volume of Inflation, being printed by the Federal Reserve, which drives the value of the "dollar", downward. Ordinary products, like gasoline, reflect this disparity. As value goes down, producers jack their price upward, such that the increased volume collected, may seem to over-come the loss of value.
Yet, the Federal Reserve, which was founded by Congress in 1913, seems insulated from any oversight, by Congress, absent a minor effort by Ron Paul. And sure as"m0ney" seems worthless, Congress seems unwilling to repeal, what they put on the books 99 years ago, and restoring real, as Constitutional money ( Art. 1, section 8) to the economy.
Lastly, Democrats, in particular, seem unwilling to view Inflation as a bad thing, even though they suffer just as much as anyone else. You might want to acquire an article, printed in the American Spectator, for February 7, 2012 ( I got it as a download, but the page slid just enough,going through the printer, that the full website, is not available). The article's Author cited results of a survey on economics, asked of 4,835 individuals, with a result that Democrats scored 4.95 incorrect answers;Republicans at 1.61 and Libertarians at 1.26.
Readers may want to contact the Ludwig vonMises Institute at Auburn University, for further enlightenment. Or, the local to you, Libertarian Party organization. I am the Libertarian Party candidate for US House, from NH's 2nd distict.

I was pretty upset this morning paying 3.59, but this story makes me feel better: or maybe it's just Schadenfreude!

No politicians are yelling for a new larger pipeline going from the Gulf Coast refineries to the East Coast, yeah okay, and the West Coast. I do believe this point alone could lower gas prices.

A couple of my neighbors who work in the refineries and come up to their week end cottages, stated production was up, but the US is using less. Foreign demand is driving the price along with transportation costs.

Nah! Obama is probably taking kick backs from the big oil companies like Bush did in '08.

"At least we have the sunshine?"

Actually, in addition to having the cheapest gas prices in the state, we also have 149 more hours of sunlight per year and ten more clear days than California, according to the National Climatic Data Center.

Life in Colorado is pretty good!

As a California native, a former Colorado resident and a gal currently beating the gas crunch by biking around my new home in the Mexican Caribbean... I have to say Tess - that was a low blow at Colorado! Clearly you've never enjoyed the nearly 300 days of sunshine the state has to offer... nor the cleaner air, less traffic, nor the amazing quality of "most" of the people in this fine state. Scott calling his brother a jerk for living the life of cheap gas was a funny quip. Your cheap shot of sunshine was not. Too bad y'all can't enjoy the life of the Caribbean on a beach cruiser where you don't have to worry about any of it! Choices folks, it's all about choices! Love and Light from Playa del Carmen.

And I was cringing at $3.59! Why has NPR not investigated the fact that the price of gasoline has decoupled from the price of crude?

Come on guys. This was pretty superficial. In Washington state almost all the refineries are outside of Bellingham but Bellingham also consistently has the highest prices while places in Eastern Washington always have lower prices even though they are farther away and are subject to the same taxes. The oil industry manipulates the market based on what they decide consumers in different cities will be willing to pay. The oil industry is so inelastic that they can get away with this and their army of lobbyists keep anyone from asking too many questions. http://www.washingtongasprices.com/

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