Possibly the most reliable indicator for the economy for the everyman is not the Dow, or crypto, or the federal interest rate, but the prices at the gas pump.
The rural life of California’s northern reach often necessitates a reliance on automobiles those in urban areas do not require. Miles of mountain roads and highways result in sharp increases in gas prices disproportionally affecting rural Americans. Couple this with the reality that most rural areas do not have the benefit of a robust public transit system, the economic impact of rising gasoline prices on rural life is pronounced.
Dennis McFarland, owner of Ukiah-based trucking company McFarland Trucking, told us his industry has been feeling the squeeze.
“In the last week, our diesel price has increased 80 cents, ” McFarland said. The trucks, he explained, “average about 5.5 miles per gallon which adds about 6 to 7 dollars an hour to our cost, not counting the increased cost of all the other petroleum-based products we use.”
In the trucking industry, engine oil is a vital resource which McFarland told us “has increased by about 5 dollars a gallon and has become difficult to get.”
Looking ahead, McFarland is forecasting that these gas prices could affect his business’s overall profitability. He is currently trying to pass on the increased costs to consumers, but McFarland does not know “how much the market will accommodate that.”
Tim Schmadeke, an Uber/Lyft driver in the Ukiah Valley, compared his current weekly gas expenditures to those of two years ago. In 2020, he would pay $200 per week. Now, he is paying $350 per week “adding an extra $150 dollars to my cost of doing business.”
Schmadeke told us Uber/Lyft have not raised their rates so “the drivers have been eating it, and eating it we are.” Watching gas increase over the last few weeks, Schamadeke is predicting he will be paying $400 in the coming weeks.
“It has really become a daily struggle to find the cheapest gas in town just trying to save a few bucks,” Schmadeke said.
California currently has the highest average cost for a regular gallon of gas at $5.257, as per GasBuddy.com.
Economists are pointing towards two converging forces causing this dramatic rise in gasoline price—a long growing supply/demand of gasoline and California’s shift to it’s summer fuel blend.
As per an article in the Los Angeles Times entitled “What’s behind California’s painful gas prices? Oil, taxes and geopolitics”, American demand for petroleum currently outstrips its supply. Domestic oil production began to fall in 2019. Internationally, sanctions against Iran and Venezuela took significant oil producers out of the world market. OPEC also made a decision to cut world wide production before the pandemic hit.
When COVID-19 left the world in lockdown, the American Petroleum report documented a marked rise in medical plastics and packaging materials. The pandemic also saw a rise in the demand for truck fuel as more and more Americans used online shopping to stay supplied.
On top of all of this, the sanctions levied by the United States and European Nations against Russia have taken another significant producer of crude oil out of the global market. This leaves a glaring gap between production and consumption of gasoline.
Another reason Californians are particularly vulnerable to these gas hikes is environmental regulations that require gasoline producers to follow specific formulas designed to decrease air pollution. Calculations completed by the Western States Petroleum Association indicate that residents of the Golden State are paying an extra $1.27 per gallon as a result of a 51-cent excise tax and 2.25% sales tax.
Looking ahead, consumers would be wise to cut expenditures elsewhere. Gasoline prices are expected to rise more before they fall, as per the U.S. Energy Information Administration.
Below is the range of cost residents will see for a gallon of regular gasoline in major cities throughout the North Coast. Multiple municipalities are well on their way to the $6 per gallon mark. The prices were sourced from GasBuddy.com, which uses a crowdsourcing model to get real-time updates on gas prices.
- Ukiah—$4.77-$5.09
- Fort Bragg—$4.84-$5.09
- Willits—$4.69-$5.15
- Laytonville—$5.35
- Garberville—$5.45-$5.75
- Eureka—$4.77-$5.75
- Crescent City–$5.43-$5.81
- Santa Rosa—$4.79-$5.39
- Clearlake—$4.79-$4.99
Unpleasant fact in the face of those who hate Donald Trump. (Actually, his personality annoys me, but his policies were sound). When the former president left office, America was totally energy independent. I purchased gas in Wyoming for $2.98. We were exporting oil to other parts of the world. Biden’s elected and then what? His administration immediately shuts down the keystone pipeline and stops drilling on federal lands. In his state of the union address Corn Pop Joe promised 50,000 new electric vehicle charging stations all across the USA. Get it? Green new deal. Climate cult headed your way. Curtailing the production of oil in our country was deliberate. Deliberate! Buy a Tesla or else. In terms of the average wage in Mendocino County this would cost more than someone makes in a year. Then what? Food stamps and sleep in your electric car? Even worse, under Biden’s administration, America began importing oil from Russia. Russia! The money Putin has made on that has turned into bullets fired at the Ukrainian people. Yes, as Clinton and Obama zealots used to say: “elections have consequences.” They certainly do and have. Next time you have to go to a gas pump, watch the spinning numbers on the meter empty your purse or wallet again.
Could have said it any better! This is so true.
Among many factually incorrect details you providyou present a highly oversimplified perspective on how the oil market actually functions without facts to support it.
We have never been energy independent in the modern era.
The US is a recent Net Exporter of crude oil and oil products.
But have never stopped importing from around the world.
The US has been importing oil from Russia since well before 2009 without interupption.
Drilling on federal lands was NOT stopped.
They stopped NEW leases on federal lands without the standard environmental review done for decades…a fiasco allowed by Trump without legislation.
Oil is a Commodity on the world markets…this is far from new.
Our oil market is not isolated from the world.
Your argument is easily flayed by facts.
Spend some time looking at facts before spewing crap please.
https://www.eia.gov/petroleum/imports/browser/#/?vs=PET_IMPORTS.WORLD-US-ALL.A
There’s plenty of real data out there that’s easily found if you just look.
Same to you Kat
PS. As of this morning, we are still importing oil from Russia. Additionally, Russia is representing the USA in renewed negotiations with Iran to put Iran back on the nuclear bomb trail.
well said Michaelkoepf.
the next crisis dejour, as the veeed concern winds down in time for the elections, in an attempt to keep us all under a boot of tyranny and the “great reset”.
You’re of course welcome to you’re own view…but making up falsehoods or blindly believing bullshit spread by others to meet your own view is just plain crap.
Do some due diligence
Drive your hot rod Hemi to the next protest for oil drilling ban? Gas prices only effect me at the grocery store as they drive inflation. I ride a bicycle.
Fun facts. America has the worst public transport system in the world. India is better, Japan and Germany are shining lights of success. San Francisco is great, Atlanta is great but Mendocino County sucks.
Train service to the coast from Mexico to Canada would solve many economic problems. Cloverdale to Eureka would need a better choice of route, it was too expensive to maintain.
Greyhound no longer goes from Reno to Las Vegas, one must go through LA and Oakland, I did that ride in 2005
Stop complaining and get out of your cars.