Pressure on Pump Prices Not Expected to Ease
California motorists are paying a record tab at the pump, the Energy Department reported Monday, and market watchers predicted that prices won’t decline much in the near future.
Gasoline prices in California and around the country have been rising for several weeks because of higher costs for key gasoline components, a switch to more expensive summer fuel blends and increasing demand.
California prices--which are at an all-time high, not adjusted for inflation--got an extra boost because of a shift in pricing strategy by Tosco Corp., which increased wholesale prices to its dealers in Southern California and Arizona that sell under the 76 and Circle K brands.
Tosco also tied those prices to the spot market for gasoline. Several other suppliers have matched the Tosco increases.
A fire April 23 at the Tosco refinery in Carson caused wholesale prices to jump more than 7 cents in Los Angeles, to $1.425 for a gallon of regular gasoline.
But after traders digested the news that the damage to the refinery’s coker unit would not hurt gasoline production, spot prices dropped back to pre-fire levels, according to Bloomberg News.
Retail prices followed the spot market higher but have not yet turned in the other direction.
“Prices don’t look like they’re going to be heading down any time soon,” said Mary Welge, a senior editor with the Oil Price Information Service, which tracks gasoline prices.
The average price of self-serve regular gasoline in California jumped nearly 4 cents to $1.867 a gallon in the last week, according to the Energy Information Administration, a research arm of the Energy Department.
The agency conducts a weekly survey of 800 service stations around the country.
Nationwide, the average price for self-serve regular inched up less than 1 cent to $1.626 a gallon. A year ago, the U.S. average was 21 cents lower and the California average about 19 cents lower.
The last time California gasoline prices approached this level was Sept. 11, when the average hit $1.847 a gallon. The U.S. average hit a high of $1.71 a gallon June 19.
Californians paid more for gasoline in 1981, based on inflation-adjusted figures. The pump price then was $1.346 a gallon, or the equivalent of $2.71 in 2000 dollars.
Another fire, this time at a Tosco refinery in Illinois, sent gasoline futures soaring Monday on the New York Mercantile Exchange.
Gasoline for May delivery traded as high as $1.163 a gallon, a record in the 17 years that futures for unleaded gasoline have traded, and closed at $1.130 a gallon, up nearly half a cent.
