Sharp Pump Price Increase Continues
Gasoline prices spurted higher nationwide in the last week led by a 12-cent jump in California’s average per-gallon pump price, an increase blamed on refinery problems, higher oil prices and rising demand.
Los Angeles motorists got the worst of it, paying an average of $1.444 a gallon, up about 14 cents, for self-serve regular gasoline, according to a weekly survey of 800 service stations released Monday by the Energy Information Administration.
The U.S. increase of 7.9 cents per gallon was the second-largest on record, bringing the average price of self-serve regular gasoline to $1.223 per gallon. A year ago, the price was nearly 19 cents per gallon higher.
California prices rose more than any other state, increasing to $1.454 per gallon. Last year at this time, the average price in California was $1.70 per gallon. In San Francisco, the weekly average increased 9.7 cents to $1.44 a gallon.
Gasoline prices are reacting to reduced supply brought about by routine refinery maintenance as well as more serious refinery problems in California and Texas. In addition, demand for gasoline is up because of the economic recovery.
Strong oil prices, boosted by fears of war with Iraq, also are pushing gasoline prices higher, analysts said.
Crude oil and gas futures hit the highest prices in nearly six months Monday. The April contract for West Texas intermediate, the U.S. benchmark, closed at $24.31 a barrel, up 47 cents, on the New York Mercantile Exchange. Gas futures for April delivery reached 79.1 cents a gallon, up 2.29 cents.
Wholesale prices in California leaped about 25 cents a gallon last week primarily due to outages at the Valero Energy Corp. refinery in Wilmington and the ChevronTexaco Corp. refinery in Richmond. California refinery problems immediately boost prices because few refineries outside the state can produce California’s cleaner-burning gasoline, which is mandated by air pollution regulations.
Those refineries are coming back on line and routine maintenance at other refineries is ending, which is calming spot gasoline markets in California, said Mark Mahoney, West Coast market analyst for Oil Price Information Service, a Lakewood, N.J., firm that tracks gas prices. The latest AAA gas numbers, supplied by OPIS, show gasoline prices up in California and nationwide, although not as much as in the EIA survey.
Prices should moderate for a few weeks, barring new refinery breakdowns or significant oil price increases, but will begin rising again with the start of the summer driving season, Mahoney said.
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