Calif. Gets Slight Easing of Gas Prices

Times Staff Writer

Gasoline prices in California fell for the first time in 12 weeks -- but the reprieve didn’t extend to Los Angeles, where the average price ticked up three-tenths of a cent to $2.137 per gallon, federal officials said Monday.

Los Angeles was the only one of six metropolitan areas in the country surveyed by the federal Energy Information Administration where prices rose for the seven-day period ended Monday.

The price hike was blamed on the lagging effects of several refinery glitches, the shutdown of a key gasoline-producing plant in Carson and troubles with switching to the state’s special blend of summer gas.

Even with the increase, Los Angeles prices remained lower than the statewide average, which fell two-tenths of a penny to $2.143 per gallon. Nationwide, gas prices fell by 3.8 cents to an average of $1.69.


California requires a special fuel formulation to reduce smog, and gasoline prices here have risen more sharply than the rest of the nation. The price dip follows recent hikes in California gasoline production and a seven-day slide in crude oil prices that began March 13.

On Monday, however, crude oil and gasoline prices reversed course on fears that the war in Iraq would be more lengthy and difficult than originally thought. The cost of crude rose $1.75, or 6.5%, on Monday to $28.66 per barrel -- still well below the $37.83 price March 12.

Despite the hike in crude prices, state regulators say California’s gasoline supply crunch is beginning to ease as refineries step up production. The most recent figures, covering the week that ended March 14, showed that California refineries produced 8.3 million barrels of motor fuel, a 17% increase from the previous week.

The figures probably will improve still further in the next few weeks. A BP refinery in Carson -- which serves Arco stations -- reopened last week after a major overhaul, a BP spokeswoman said Monday. The refinery, closed since Jan. 15, produces about 96,000 barrels of gasoline per day, equal to about 10% of the state’s total daily output.


The rising prices in California have prompted several calls for investigations into price gouging.

On Monday, Sen. Barbara Boxer (D-Calif.) introduced legislation “to curtail market manipulation practices in the gasoline market.” The bill requires the Federal Trade Commission to automatically investigate the gasoline market any time average retail prices in any state rises more than 20% in three months or less.

Gasoline prices are not regulated, however, and previous probes have largely failed to prove that oil companies are gouging or manipulating the market to boost profits. But Boxer says the prospect of regular federal scrutiny may in itself help keep the companies from misbehaving in the market.

“I believe the threat of these investigations will have a dampening effect on prices,” Boxer said.


Despite the recent dip in pump prices, the gasoline and crude oil markets remain volatile.

Violent clashes in Nigeria, for example, stopped the flow of 800,000 barrels per day of crude over the weekend and helped rekindle concerns on Wall Street on Monday. Nigeria was the nation’s fourth-largest foreign supplier of crude oil in January.

San Ramon, Calif.-based ChevronTexaco Corp. is one of several oil companies hurt by the unrest in Nigeria. The company evacuated its workers and shut down oil and natural gas production in the country’s Western Niger Delta. The project provides about 7% of the firm’s global production, and its loss implies that ChevronTexaco may not hit earnings forecasts.

The company’s stock fell $1.02 to $64.98 in New York Stock Exchange trading Monday amid a broad sell-off that brought most stocks down.