State’s Gasoline Price Average Tops $2 a Gallon

As gasoline prices continued their steady climb nationwide, a federal report Monday showed that the past week’s increase was three times higher in California, where the average price per gallon of regular crossed the $2 mark for the first time since the Energy Department began tracking the data in 1995.

The agency said the average self-serve pump price for regular gas in California jumped 9 cents to $2.012 for the week ended Monday. The statewide average is 48 cents higher than at the end of 2002.

Analysts say they believe that the higher gas prices are starting to take a toll on the already ailing California economy.

Higher gasoline prices must be “leaving less for spending on other things, since it’s been such a rapid and sharp increase,” said Howard Roth, chief economist with the state Department of Finance. “It does have a drag on the economy.”

Some industry executives and consumer advocates say motorists in the state should brace for possible further increases in coming weeks.

Gas prices “will continue like this for the foreseeable future,” said Bob van der Valk, manager of fuel supply and marketing for Cosby Oil Co., an independent oil and gas distributor in Santa Fe Springs.

Charles Langley, who tracks gasoline prices for the San Diego-based advocacy group Utility Consumers’ Action Network, said: “We’re breaking records right now.... Our concern is that there is just no end in sight, and we’ll see higher prices through April.”

The price picture was less dramatic for the country as a whole, with the nationwide average up 2.8 cents during the last week to $1.686, according to the weekly retail figures released by the Energy Department.

Market and industry experts attributed the latest price run-up to continued fears of a war in Iraq, as well as disruptions with supplies.

In California, refineries are in the process of switching to a summer gas formula, which is designed to help reduce harmful emissions when the weather heats up.

What’s more, major refineries are moving from the additive MTBE to less toxic ethanol-based gasoline. And some refineries are closed for maintenance, said Rob Schlichting, spokesman at the California Energy Commission.

At the same time, the oil industry is enjoying big profits, some say.

“We haven’t reached the obscene profit level -- we’ve just reached the excess profit level for the oil companies,” Van der Valk of Cosby Oil said.

Oil companies have said that the recent gasoline price hikes stem from the higher cost of crude oil and other factors. Spokeswoman Nicole Hodgson of ChevronTexaco Corp. said the San Ramon-based company prices gas “according to supply and demand and the competition.”

Gasoline prices were deregulated in the 1980s, and government and consumer agencies say that leaves the motoring public with little regulatory recourse when prices rise.

The latest gas price reports prompted state Energy Commission Chairman Bill Keese to release a statement Monday urging motorists to reduce consumption and to shop around for the lowest prices.

“In a free-market economy, if consumers avoid the highest-priced gasoline, those retailers will have to lower their prices to remain competitive,” Keese said.

Within California, San Francisco motorists have felt the sharpest pinch from the price run-up. A gallon of regular gas in the Bay Area is in its second week of $2-plus prices, up 7.7 cents a gallon just in the last week to $2.088.

In Los Angeles, the average price for regular rose 9.7 cents to $1.983, according to the federal survey.

A separate survey Monday by AAA showed that prices for diesel fuel also are approaching record levels, putting a further pinch on the state’s industrial sector.

Diesel prices averaged $1.932 on Monday, up from $1.711 a month ago.