Pinch at the pump worst in 25 years

Times Staff Writer

The state’s motorists paid an average of nearly $2.81 a gallon for gasoline this year, eclipsing a 25-year inflation-adjusted record, the California Energy Commission said Tuesday. And experts predicted more price pressures at the pump in 2007.

The state’s refineries face a heavier maintenance schedule in 2007 than they did in 2006, analysts said. California also is among the first states set to switch from winter-blend gasoline to a pollution-fighting warm-weather formula. Both factors will lead to more downtime at refineries and a straining of output in coming weeks.

Tom Kloza, chief oil analyst for Oil Price Information Service of Wall, N.J., used a heavy-weather analogy to describe what may be brewing at California pumps.

“If I were a hurricane forecaster, I would say there is a good possibility for lots of convection,” he said. “There are going to be higher wind speeds and updrafts there than for the rest of the country.”


For the week ended Monday, the average price of self-serve regular gasoline in California rose 4.6 cents to $2.607 a gallon, according to the U.S. Energy Information Administration’s survey of filling stations. That was up 37.4 cents from a year earlier.

That helped raise the national average 2.1 cents to $2.341, or 14.4 cents higher than a year earlier.

Analysts attributed the rise to higher-than-normal driver demand in December. But whatever the factors may be as the year comes to a close, a new price standard was set in 2006.

California pump prices hit their high mark, $3.332, in May. Crude oil futures rallied somewhat toward the end of the year and remain above $60 a barrel after a long slide from their record-high close of $77.03 in mid-July.


The California Energy Commission said motorists through Monday had paid $2.808 on average this year for a gallon of self-serve regular. That’s an increase of 6.5% from the previous record of $2.636, set during the energy crisis of 1981, when prices are adjusted for inflation.

Two differences between then and now, and the reason the record may pass relatively quietly here, are that high prices have become the norm and that supply is not the central issue.

“For one thing, there are no lines around the block of people waiting to buy gas. There is no real shortage,” said Marie Montgomery, a spokeswoman for the Automobile Club of Southern California. “We don’t have that panic. We have supply; it’s just that our supply is very expensive.”

Oil prices will remain a wild card for gasoline in 2007 as supply and demand remain in tenuous balance and political events can roil markets quickly.


On Monday, crude for February delivery declined $1.31 to $61.10 a barrel in New York trading on light volume and profit taking, analysts said.

The crude oil price fell despite an explosion in Nigeria in which at least 260 died after thieves were believed to have punctured a pipeline, and a pipeline rupture in the Gulf of Mexico.