14-Day Gas Price Jump Sets Record
California gasoline prices rocketed 18 cents a gallon for the second week in a row, federal officials said Monday, forcing motorists to pay an average $2.101 a gallon as they gear up for Labor Day weekend.
The increase is the steepest 14-day jump recorded in California by the federal Energy Information Administration, which began tracking weekly retail prices here in 1995. The largest one-week increase came March 29, 1999, when the cost of a gal- ln of self-serve regular soared 22.8 cents.
Nationwide, average prices jumped 12 cents to $1.747 a gallon over the last week.
Government and oil industry officials attribute the surging prices to low inventories of gasoline, exacerbated by blackout-related refinery outages in the East and Midwest, mechanical troubles at several West Coast refineries and a pipeline break in Arizona that left hundreds of Phoenix stations without fuel.
“Those are legitimate cases for a temporary spike in prices, but I don’t see how it justifies this huge spike,” said Anthony Sabino, an associate law professor St. John’s University’s Peter J. Tobin College of Business, where he specializes in oil and natural gas issues. “One has to question the timing of this ... coming just before the biggest driving weekend of this country.”
Anita Mangels, a spokeswoman for the Western States Petroleum Assn., rejected the suggestion that oil companies were driving up prices to juice their profits.
“We’re very much aware of and sensitive to consumer concerns and suspicions as to the reasons, but the facts are very clear that this is a reaction to market conditions,” Mangels said. “When you have disruptions in supply and distribution in three Western states, there will inevitably be impacts on the market, and there’s just no getting around that.”
In mid-August, mechanical problems hit four California refineries, causing statewide production to drop by 10% at one point, said Claudia Chandler, assistant executive director of the California Energy Commission. In addition, problems squelched gasoline production at a Washington refinery that sometimes supplements California supplies.
California also has been squeezed by the pipeline rupture in Arizona. A corroded gasoline pipeline from Texas burst July 30, effectively cutting off 30% of Phoenix’s supply.
California refineries sent extra gasoline east to ease the crunch, and the diversion boosted prices here. Kinder Morgan Energy Partners, which owns the pipeline, bypassed the damaged segment Sunday and resumed large shipments of fuel to Phoenix.
California’s prices remain below the record average of $2.145 hit March 17. But experts say pump costs probably will stay high -- or even increase -- before dipping next month as consumer demand ebbs with the end of the vacation season.
Of the major cities surveyed by the Energy Information Administration, Los Angeles had the sharpest rise, up 21.9 cents to $2.141 for self-serve regular. New York, Chicago, and Boston saw gas prices jump more than 16 cents in the last week.
The price increases in California round out to 18 cents a gallon for the last two weeks, but there were slight variations. Prices rose an average of 18.1 cents a gallon for the week ended Monday, up from a 17.7-cent rise for the week ended Aug. 18, according to the EIA, the statistics arm of the Energy Department.
The cost of crude oil, the principal ingredient in gasoline, has not been a major factor in the latest price run-up at the pump. Oil prices have stayed at $31 to $32 a barrel since July.
