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Jump at the Pump

Southland Gasoline Prices Rise 7 Cents, Could Go Higher

March 23, 1996|PATRICK LEE, TIMES STAFF WRITER

Southern California gasoline prices have jumped an average of 7 cents a gallon at the pump in the last month because of a sharp rise in crude oil prices, the lowest crude supplies in 19 years and the higher cost of making new state-mandated cleaner-burning fuels.

And analysts don't expect prices--which have surged as much as 10 to 12 cents a gallon at some service stations--to drop in the near future.

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"We're heading into the summer travel season . . . [and] prices tend to peak in the summer," said Michael Morrissey, a spokesman for the American Automobile Assn.

For motorists like Antoinette Mongelli of Pasadena, the increased costs add up. Mongelli commutes 60 miles a day for her job at UCLA, spending as much as $100 a month on gasoline.

The pump price hikes have added $10 to her fuel bill: "That's lunch money for me for two days," she said.

The average retail price of regular unleaded gasoline in metropolitan Los Angeles has increased about 7 cents a gallon since the middle of February, according to the Computer Petroleum Corp. in St. Paul, Minn.

As of Thursday, the price stood at $1.252, up from $1.228 on March 16 and $1.181 on Feb. 10, Computer Petroleum reported.

Nationally, the average price of unleaded gasoline was $1.17 on Thursday, up 4.3 cents since Feb. 10, the firm said.

The main reasons for the sharp price hikes:

* Crude oil prices have been rising since early February, in part because weather-related demand for heating oil in the Midwest and East has outstripped supplies worldwide.

In addition, fear that the United Nations may soon permit Iraq to begin limited oil exports for the first time since the end of the Persian Gulf War has led refiners and others to slim down inventories of crude.

U.S. crude oil inventories last week hovered near a 19-year low at 299.7 million barrels, down 8% from a year ago, the American Petroleum Institute reported Tuesday.

As a result, the spot market price of light crude oil spiked by $5 a barrel, or nearly 26%, since the beginning of the month to a peak of $24.30 on Tuesday, its highest level since the Gulf War, before falling later in the week, the API reported. On the futures market, contracts for crude oil climbed to three-year highs Friday.

* Refiners were required to begin producing cleaner-burning reformulated gasoline by March 1 under California Air Resources Board rules.

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