Gasoline prices continue to surge
Motorists, open your wallets.
Gasoline prices have pushed past $3 a gallon in parts of California with no letup in sight. Over the last week, average pump prices jumped at least a dime a gallon in much of the nation, the Energy Department said Monday.
Fuel experts blamed the multi-week surge on refinery and pipeline problems, strong oil prices, unusually high driver demand and the tricky annual change to less-polluting summer gasoline.
Drivers just want it to stop.
“This is very bad,” said Kevin Kiroub as he pumped $2.899-a-gallon gasoline into a custom Chevy Silverado 2500HD pickup truck at a Chevron station just west of downtown Los Angeles. Kiroub owns Iceberg Heating & Air Conditioning in Sunland, and he really racks up the miles on the truck, which runs on a 6.0-liter V-8 engine that generates 353 horsepower.
“We service air-conditioning units all over the area. We travel all of the time, and this is really hurting our business. We have had to raise our prices, and we have lost a lot of good customers,” Kiroub said.
Kiroub increased the cost of a service call to $69.99 from $49.99, and he no longer travels to Palm Springs and San Diego for work. “We just can’t afford to.”
A couple of pumps away, Victor Velez was trying out a new way of buying gas for his 1987 Ford Econoline van. The graphic designer refuses to look at the price and buys $20 of fuel each day. But the new system doesn’t work, Velez said, because he gets behind the wheel and sees that the fuel gauge has been moving less and less toward the full mark.
“I spend too much on gasoline now. It’s a problem because I’ll drive as much as 100 miles in a day for my business,” said Velez, who owns the nearby Dolphin custom sign company.
On Monday, the average price of a gallon of self-serve regular gas in the U.S. reached $2.505, up 12.2 cents from the previous week and 17.4 cents above the year-ago price, according to the Energy Department’s weekly survey of gasoline station prices. The increase was driven by a 15.4-cent rise in East Coast states and a 16.3-cent gain in central Atlantic states.
California’s pump prices have risen at a slower rate than the U.S. average, but they have built on their most expensive start of the year ever. The average price on Monday hit $2.897 a gallon, up 10.1 cents from the previous Monday and 41.7 cents above the same week in 2006.
“California marches to the beat of a different drummer with tighter supplies and less room for error than any other part of the country. Right now that drum is loud, and it’s echoing throughout the state,” said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey.
The average gas price was $3.081 a gallon in San Francisco and $3.017 in San Barbara on Monday, according to AAA’s daily electronic survey of gasoline retailers’ credit card sales. The Energy Department pegged San Francisco’s average gas price at $2.998 a gallon on Monday.
California’s high gasoline prices generally reflect huge increases in population and fuel consumption without similar growth in refining capacity, said Jeff Spring, spokesman for the Automobile Club of Southern California.
“We can produce 43 million gallons of gasoline a day in California, but the demand is for 45 million. The difference has to be imported, and those sources are all very far from here,” Spring said.
The latest run-up in California and nationwide has been fueled by extensive refinery maintenance compounded by unexpected problems, said Diane T. Miller, an analyst at Oil Price Information Service, which tracks energy markets. California particularly felt the shutdown of Valero Energy Corp.’s McKee, Texas, refinery, which supplies gasoline to Arizona, adding demand on that state’s other major source for fuel: Los Angeles-area refineries.
