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Drop in Gasoline Prices Expected

Fuel begins flowing though a bypass at a damaged Arizona pipe, which had boosted a run-up at the pumps.

August 25, 2003|Richard Verrier | Times Staff Writer

California motorists, socked with the sharpest jump in gasoline prices in several years, soon will get some relief at the pump, according to a leading national survey released Sunday.

"We do not expect the [high] prices will last long," said Trilby Lundberg, editor of the Lundberg Survey, which includes 8,000 gas stations.

The national average price for self-serve regular gasoline rose 15.53 cents to $1.7191 a gallon in the two weeks ended Aug. 22, the biggest increase in the 50-year history of the survey.

However, Lundberg predicted that prices may drop "very quickly," citing the recovery from the Aug. 14 East Coast and Midwest power blackout that triggered refinery shutdowns; an influx of imported gasoline; and the reopening of a pipeline in Arizona.

Kinder Morgan Energy Partners of Houston resumed the shipment of gas through its pipeline Sunday after work was completed on a bypass around a damaged section. When the pipeline ruptured July 30 outside Tucson it led to widespread shortages in the Phoenix area and contributed to a spike in pump prices in California. The pipeline supplies 30% of Phoenix's gasoline.

"We have been working non-stop to increase gasoline volumes to our Arizona customers, with safety as our top priority," Tom Bannigan, president of the company's products pipelines, said in a statement Sunday.

Oil companies responded to the pipeline shutdown by increasing the flow of gasoline by 15% in pipelines to Phoenix from refineries in Southern California. The American Petroleum Institute said the increased flow to Phoenix helped boost the average price in California by nearly 18 cents a gallon during the week ended Aug. 18.

The bypass pipe has the capacity to transport 35,000 barrels a day of gasoline, jet fuel and diesel fuel to Phoenix and should eliminate the need for companies to truck fuel to Phoenix from Tucson and other areas, the company said. The pipeline previously carried about 54,000 barrels per day.

To help the shortage, federal regulators also have temporarily waved restrictions that Phoenix use cleaner-burning fuel. Despite such measures, it is expected to take at least a week before supplies are fully restored.

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Times wires services contributed to this report.

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