Pump Prices Leveling Off

Gasoline prices in California and the nation leveled off over the last week, ending their steep climb just as the summer driving season drew to a close.

A gallon of self-serve regular averaged $2.10 statewide for the seven-day period ended Monday, about even with the week-ago average of $2.101 a gallon, the federal Energy Information Administration said.

Prices had soared 36 cents a gallon in the two weeks before Aug. 18, California’s sharpest 14-day rise in retail costs since at least 1985.

After hitting a record high of $1.747 a week ago, nationwide prices stayed flat, averaging $1.746 for a gallon of regular during the week ended Monday.

The abrupt spike in pump prices across the country in August outraged politicians and consumer groups, who accused the oil industry of pocketing extra profit as motorists prepared for Labor Day, the nation’s peak driving holiday.

Industry and government officials blamed the most recent price increase on supply shortages caused by temporary refinery outages, which were set off by the power blackout in the Midwest and East Coast, mechanical troubles at a few California refineries and a busted fuel pipeline that caused gas stations to run dry in Phoenix.

Gasoline inventories remain low across the country, but analysts say most signs point to lower prices ahead.

Refineries affected by the blackout are back on line, and an interim pipeline fix is bringing supplies back to normal in Arizona.

In addition, only one of California’s 13 gasoline-making refineries still is having mechanical troubles, said Rob Schlichting, a spokesman for the California Energy Commission.

On Tuesday, commodity traders sent gasoline and oil futures prices lower on the expectation that fuel demand will drop now that family vacations are over and kids are heading back to school.

The cost of crude oil fell $2.16, or 6.8%, to $29.41 a barrel on the New York Mercantile Exchange, representing the steepest one-day drop since March 18 and the lowest close since June 27. Gasoline futures fell 8.08 cents to 84.74 cents a gallon on Nymex on Tuesday.

“Optimistically, unless something happens, I would say prices are on their way down,” Schlichting said.

Gas prices in California hit a record $2.145 a gallon for regular March 17. Although today’s average of $2.10 is well below that, it remains more than 50 cents a gallon above the year-ago average.