Drivers Fume at Sharp Jump in Gas Prices

Motorists who have stopped for a fill-up over the past few days have been greeted by a nasty shock: Gasoline prices, which have been creeping up since January, suddenly have rocketed to their highest levels since the Gulf War.

Oil companies and gasoline retailers blame geopolitical and market forces for the uptick and say they don’t like it any more than customers do.

But at the gas pumps, customers have little sympathy.

“It’s greed, dammit,” said Mark Perez of Reseda, who bought gas at a Chatsworth station Friday where regular unleaded had climbed to $1.49 per gallon.

“We’re getting gouged,” said Steven Johnson, a truck driver for World Messenger Service who bought gas at the Chatsworth Mobil station, where prices range from $1.49 for regular unleaded to $1.59 for high-octane.

Roberto Torres of Chatsworth said that each time he goes to the pump he pays only what he can afford--usually about $7. These days, that is not getting him very far. “Maybe next month, I won’t drive,” he said.

Gas prices in California have gone up about 17 cents to $1.40 per gallon of unleaded since mid-February, according to the Automobile Club of Southern California.

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But this week, there was a sudden jump: At least two oil companies boosted wholesale prices 9 cents a gallon Monday, causing an overnight rise that caught many consumers by surprise.

For unemployed Clay Jefferson of Pasadena, who paid $1.46 per gallon Friday in Los Angeles, gasoline is now adding $10 a day to his job search.

“I remember three weeks ago it was $1.02 to $1.05,” Jefferson said. “Then it skyrocketed, and I don’t know why. It’s definitely going to have an effect on me.”

Other customers paid prices upward of $1.80 a gallon for self-serve premium at a Mobil station on Glendale Boulevard in that city. Full-serve topped $2 a gallon at a Unocal station on Verdugo Boulevard in Glendale.

“It’s craziness,” said Bob Bonner of Reseda, who bought gas at a Mobil station in the Valley on Friday. “It’s like any other necessity; you don’t really have an option. You have to drive.”

Get used to it, industry experts say. This week’s prices are expected to settle down some, but at least part of the increase is permanent.

“Gas prices have been artificially suppressed for a long time,” said Dennis DeCota, executive director of the California Service Station and Repair Assn. “It’s important consumers realize that.”

Gas prices have been going up worldwide because of a dramatic boost in the price of crude oil. That rise is tied to political forces: Oil producers have been shaving down their inventories to avert oversupply in case the ban on oil exports from Iraq is lifted.

But prices are especially high in California--about 13% above the average nationally as of Monday--because of fires and equipment problems at regional refineries.

Such problems, which interrupted production at Shell Oil’s refinery in Martinez and Arco’s in Los Angeles, coincided with the introduction of the new state-mandated cleaner-burning fuel aimed at clearing L.A.’s skies. Wholesalers had to change over to the new gas Monday. It has cost oil companies more than $4 billion to retrofit refineries to produce the new gas.

When the refinery problems hit, there were short supplies of the new gas because out-of-state refineries don’t usually make it.

The result has been pandemonium in the local oil market as suppliers scramble to buy up dwindling supplies of surplus gas.

“Everything had positioned itself for this spike,” DeCota said.

Although industry experts expected price increases of 5 to 15 cents a gallon as a result of the new gas, “there was never expected to be a fuel supply problem,” said Daven Oswalt, spokesman for the California Air Resources Board.

The board has asked oil companies to attend a hearing Thursday to explain the price leap.

Meanwhile, gas station owners are finding that they have plenty of explaining to do.

“You try to explain that it’s because of the new gas coming in . . . and that if we care about the health of our children, someone has to pay,” said Bhupinder Mac, who owns four Ventura Boulevard stations. “But they aren’t too happy about it.”

“All the day long, all I talk about is the price,” said Adel Rafila, manager of Rafi’s Chevron in Northridge. “The customers are very mad.”

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Nonetheless, Rafila, who was charging $1.47 per gallon of unleaded Friday, said he planned to raise the price another 2 cents Friday night in response to another expected price increase from his supplier. Besides, he said, that’s what neighboring stations are charging.

Most gasoline retailers set their own prices, although they are subject to wholesale prices set by the oil companies. In fact, until recently, many California retailers had been keeping their prices artificially low for competitive reasons, taking a hit on their profits, said DeCota of the gas station association.

Mac said his profit margin did grow from 6 cents a gallon to 8 cents after he raised his prices about 10 cents across the board, but he fears that people will now start conserving gas, and he will lose volume.

Gas station owners commonly are under pressure to keep prices low because they pay rent to oil companies based on the volume of gas they sell, but “somewhere you have to give in,” Mac said.

For their part, oil companies say they are far from gleeful gougers.

“We don’t like this disruption to the market any more than anyone else. This is the kind of thing we don’t need when we are trying to introduce a new product,” said Dennis Lamb of Unocal.

Times staff writer Kenneth Chang contributed to this story.

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Gas Up

Gasoline prices have soared in the past month, with some stations selling full-service premium as high as $2 a gallon. Prices in California are about 13% above the national average. Shown below are national and statewide averages per gallon for self-serve regular unleaded gasoline.

Nationwide*

1990: $1.24

1991: $1.12

1992: $1.08

1993: $1.12

1994: $1.09

1995: $1.13

1996: $1.24

California

Feb. 1996: $1.23

April 1996: $1.40

* Mid-April per gallon averages.