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Gasoline costs driven to a record

ENERGY

California's average hits $3.359 for a gallon of regular. Many analysts blame the run-up on a string of refinery woes.

May 01, 2007|Ronald D. White | Times Staff Writer

California's gasoline prices have cruised into record territory and ruined Greg Kimble's 33-year relationship with Mable.

Mable is a 1969 white-topped LeMans-blue Chevrolet Impala convertible Kimble named after his grandmother. And the car is going to see a lot less road time with California gasoline prices hitting a new high Monday. Kimble has decided that Mable will take second place behind a pickup truck that gets twice the mileage per gallon.

"It feels like a massive betrayal," said Kimble, a post-production visual effects supervisor who said he made the painful decision a few days ago when the Mid-City Arco station he frequents upped its gasoline price twice in a seven-hour span.

As of Monday, California drivers were paying an average of $3.359 for a gallon of self-serve regular gas, more than ever before, according to the Energy Department's weekly survey of service stations. The 4.3-cent spurt from last week contrasts with a 1.1-cent increase the week before and represents the 13th consecutive price increase in the state. The latest average topped the old record of $3.332 set May 8.

"It's forcing me to make a lifestyle change. This is a classic car, a glamour vehicle that I can't afford to drive every day anymore," Kimble said of the 309,000-mile ride he has nursed through two interior makeovers and four convertible tops.

Many fuel experts attribute the price run-up to refinery problems, which squeezed supplies. But consumer advocates blame refinery owners.

"Oil companies that have refused to increase refinery capacity enough to meet population [growth] took refineries out of service for longer-than-usual maintenance as well as fires, leaks and even shortages of repair supplies, but refused to import gasoline to make up the difference," said Judy Dugan, research director at the Foundation for Taxpayer and Consumer Rights. "Then they have the gall to behave as though gasoline prices are an act of fate, not the shortage that they created."

Nationwide, the average price for regular gasoline rose 10.2 cents to $2.971 a gallon in the week ended Monday, the Energy Department said. That fell short of the U.S. record of $3.069 in September 2005.

In the previous week, the government survey showed the U.S. average falling less than a penny, breaking an 11-week string of increases.

Two recent refinery mishaps joined a long list of production problems in 2007. A fire and explosion temporarily shut a 50,000 barrel-a-day refinery in Oklahoma and power outages were blamed for a partial shutdown of ConocoPhillips' 247,000 barrel-a-day refinery in Sweeny, Texas.

"Gasoline supplies are the tightest they have been since Hurricane Katrina in 2005," said Phil Flynn, senior market analyst for Alaron Trading Corp. "If these refinery problems continue, gas prices will continue to rise."

In addition, labor strife and worldwide demand for gasoline were placing new strains on the supply of gasoline in Europe, making it less likely that imported gasoline could mitigate price jumps in the U.S. as they did last year, he said.

Tom Kloza, chief oil analyst for Oil Price Information Service, said he still had hope that prices would decline over the next 45 days in spite of the start of the summer driving season at the end of May.

"My sense is that the spring refinery woes are a statistical cluster -- a combination of lots of maintenance, very deliberate and sensible scrutiny in restarting [production] and plain old bad luck," Kloza said.

Some California drivers say they are doing all they can to reduce gasoline consumption.

"It's outrageous. There is no reason for this at all," said Connie Christensen, 44, a San Leandro resident who commutes 25 miles to her job as an administrator for the California Pacific Medical Center in San Francisco.

Christensen said she car pools in her 2001 Toyota RAV4 by picking up strangers before she crosses the Bay Bridge into the city; she also uses the Bay Area Rapid Transit System. But Christensen said she no longer believes the explanations about refinery problems.

"It's just a scam," she said.

In New York futures trading Monday, oil fell 75 cents to $65.71 a barrel.

ron.white@latimes.com

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