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News Link • Oil

Gas is About to Get Expensive . . .

• https://www.ericpetersautos.com, By eric

The reason why, of course, is that California makes it cost about twice as much – by reducing supply and by adding costs, chiefly for "environmental" reasons. This includes a new requirement – going into effect very soon (Dec. 31) that all gas stations must either replace single-walled underground storage tanks or permanently close them – no matter whether the tanks are actually leaking and no matter how much it costs to replace them.

How much is it going to cost?

On the low end, about $25,000-$30,000 for one underground tank. Many stations have more than one. Then there is the additional expense of the work plus dealing with the piping and related underground stuff. A station that has to replace a couple of tanks is looking at a six figure bill for Christmas.

Obviously, this is an expense beyond the means of  many independent gas station owners as the profit margin on gas is barely enough to stay in business selling gas. Of course, this is why there are very few gas stations left that just sell gas left, in California or anywhere else. Most have been taken over by corporate chains that sell everything except timeshares, with gas being the incidental thing they sell.

Even so, the cost of replacing underground tanks – and the fines of $5,000 per day for not replacing or closing them by the Dec.31 deadline – are going to make it even more expensive to buy gasoline in California than it already is. It might get twice as expensive as it is right now – which is around $4.70 per gallon as of about a week before the deadline.

Consider just how much that costs.

A typical small crossover carries about 12 or so gallons of gas. That comes to about $60 for just one tank. Now imagine you're having to fill a larger tank. A typical truck or SUV carries about 20 gallons of gas; some 24-25. Assuming 20 gallons, the cost of a single fill-up in California currently costs the driver of a such a vehicle nearly $100.

Now imagine what it will cost when the costs of California's latest cost-impositions are fully felt at the pump. Say gas goes up to $6 per gallon in about a month from now, which is a realistic possibility. If it does, it'll cost the owner of a truck or SUV with a 20 gallon tank $120 to fill up just once. If he fills up once a week, it may cost him close to $6,000 per year to fuel his truck or SUV. Over six years that cost works out to $36,000 – the cost equivalent of a new truck or SUV.


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