State’s Wholesale Gasoline Prices Climb to New High

Hopes that California drivers will soon see significantly lower gasoline prices took a blow Monday as wholesale prices in the state jumped 20 cents and retail prices remained stubbornly high.

Over the last seven days, the average pump price for gasoline in California fell nine-tenths of a cent to $2.115 for a gallon of self-serve regular, according to a weekly government survey released Monday. That was well short of the several-cent decline that experts had predicted.

It also was 27 cents a gallon above the nationwide average and almost 19 cents above the year-earlier average in California, according to the survey by the Energy Information Administration, an arm of the U.S. Energy Department.

The news was worse for truckers and other diesel users, as the cost of that fuel jumped 2.7 cents in the last week to a statewide average of $2.274 a gallon. California’s price is almost 56 cents a gallon above Monday’s nationwide average.

Monday’s action in the Los Angeles wholesale fuel market doesn’t bode well for the coming weeks.

Two batches of regular gasoline traded on the Los Angeles spot market for $1.70 a gallon, a 20-cent gain from Friday’s last trade and a new high, according to Tom Kloza, chief oil analyst at the Oil Price Information Service, a trade publication that tracks fuel trades.

West Coast spot markets for fuel are notoriously volatile because prices are set by only a handful of trades. But analysts regard those trades as indicators of future retail prices. In most cases, a wild swing on the spot market reflects news of a refinery outage or some other disruption in supply, but there has been no word of that kind of problem in California, Kloza and others said.

“We don’t know of anything that would be behind that $1.70,” said Joanne Shore, who follows the California market for the Energy Information Administration. “At this point, I would lay odds on a trading fluke.”

She added, though, that even two gasoline sales at that record price show that fuel supplies remain precariously tight.

“Those are the highest numbers we’ve ever recorded for spot prices on the West Coast,” Kloza said. “But it is only one day. Sometimes these prices don’t last.”

Until late last week, spot prices for gasoline had been at low enough levels to warrant lower prices at the pump. Those decreases were starting to show up in tiny increments in retail prices -- producing a 4.2-cent drop over three weeks -- and were expected to trigger much larger declines in May.

But if spot prices remain at Monday’s level for a few days, “that almost certainly implies that we’ll surpass” the record prices that have hit California this year, Kloza said.

According to a daily survey by AAA, the highest retail fuel prices in California are in the Santa Barbara-Santa Maria region, where on Monday gasoline averaged $2.296 a gallon and diesel averaged $2.416.

Wholesale diesel prices, which have stayed at high levels for more than a month, rose 3 cents from Friday to $1.60 a gallon Monday, according to the Oil Price Information Service.

Big-rig drivers fed up with soaring diesel costs briefly blocked freeway traffic in Los Angeles on Friday and staged protests outside the ports in Los Angeles, Long Beach and Oakland. The protesters were independent owner-operators who don’t have enough clout to demand higher freight-hauling rates to offset their fuel bills.