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Gasoline hits a high for February

A gallon of regular in the state soars to an average $3.50 and may continue rising.

February 18, 2011|Ronald D. White and Stephen Ceasar

The average price for regular gasoline shot up to $3.50 statewide, the highest level ever in February, and is expected to rise further as the summer driving season approaches.

The price, which reached $3.99 in some parts of Los Angeles, was the highest since October 2008, according to the AAA Fuel Gauge Report. Some stations are charging more than $4.25 for premium and $4.69 for diesel.

Several factors have pushed gas prices up steadily this year, including the recent political unrest in the Middle East, but that didn't matter much to motorists, who reacted with a mixture of anger and resignation.

Berenice Eveno, a 25-year-old cinematographer from Echo Park, reluctantly stopped at a downtown Shell station charging $3.91 a gallon. "It's extremely high," she said of the 11 gallons she got for $43.36. "They make such a profit on it, and it's still so expensive for us. It's not fair."

Lindsey Laney, a 19-year-old college student from Pasadena, grimaced as she spent $52.48 for 13 gallons. Prices "are ridiculous everywhere," she said.

Coming more than three months before Memorial Day -- the traditional start of the summer driving season -- today's rising prices are stirring fear about how high they could go.

"Everyone is keeping their fingers crossed that we're not seeing a repeat of 2008," said Marie Montgomery, a spokeswoman for the Automobile Club of Southern California.

That year, California's average rose to a record $4.588 a gallon and the national average topped $4.11. "That would have all kinds of terrible repercussions for people," she said.

Few experts predict pump prices will go that high. But consumer advocates worry that rising prices could dent the economic recovery as consumers pay more money for fuel.

"The only way to insulate yourself is to stop using gasoline," said Mark Cooper, director of research at the Consumer Federation of America. "The cost of gasoline is the third-biggest household expense after housing and it's almost as big as medical. This is going to have a huge impact on household budgets."

The average price for regular gas in California, already the highest in the 48 contiguous states, climbed .022 cents to $3.503 a gallon Thursday, according to the AAA. That was a rise of 8.6 cents a gallon over the last week and more than 57 cents a gallon higher than a year ago. It topped the previous February high of $3.442 in 2008.

Pump shock is hitting much of the East and West Coasts, with New Yorkers paying as much as $3.79 a gallon, and parts of the Midwest, where some Chicagoans found prices as high as $3.69 a gallon.

The national average also has been on the rise, but at a more modest pace of 2.6 cents over the last week to $3.145 a gallon.

California's high prices result mainly from its increasing reliance on foreign imports, refineries operating far below capacity and the seasonal change to a more expensive summer blend, analysts say.

In addition, less oil is being produced in California than in the past, making the state more dependent on higher-priced imports.

More of the state's oil is tied to the price of so-called Brent crude from the North Sea. Its price is more than $16 a barrel higher than the usual benchmark of West Texas Intermediate crude.

Ten years ago, California derived only 29.4% of its oil from overseas, according to the California Energy Commission. More than 49% was produced from wells inside the state and more than 21% came from Alaska.

Now, 45.2% of the state's oil supplies come from foreign sources such as Saudi Arabia and Iraq. The state supplies just 39.7% of its own oil, and Alaska produces just 15.1%.

"That leaves a state like California much more dependent on more costly foreign oil sources," said Patrick DeHaan, senior analyst for gasbuddy.com, an online social-networking system in which members share the highest and lowest gas prices from 125,000 services stations around the U.S.

The reliance on foreign supplies caused prices in California to jump during the recent unrest in Tunisia, Egypt, Yemen, Bahrain, Libya and Iran, said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey.

Kloza predicts that California's average could reach as high as $3.75 a gallon.

Brent crude has been volatile amid the Middle Eastern unrest, consistently trading at more than $100 a barrel in recent weeks.

Brent crude for April settlement fell $1.19, or 1.1%, to $102.59 a barrel on Thursday, but that was still $16.23 a barrel higher than the $86.36 a barrel close for West Texas Intermediate.

Mid-February is traditionally a time when California gasoline prices begin to rise as refineries switch to a blend of warmer-weather gasoline that is more expensive to make.

California prices also are being pushed up by West Coast oil refineries' operating at only 74.2% capacity, compared with 90% or more in many other parts of the nation.

Joe Sparano, executive advisor to the chairman of the board of the Western States Petroleum Assn., defended the industry by saying the low rate could be related to getting refineries ready to produce summer-blend gasoline.

Still, some consumers were taking an almost fatalistic approach to the prices.

"You need to use your car, so you have no choice but to buy it ... you're helpless," said small business owner Alonso Larita, 40, of Culver City, who found that $25 at the downtown Shell station would buy him just 6.4 gallons for his Ford Ranger.

Others seemed to chide themselves for still being dependent on fossil fuels.

Actor and downtown Los Angeles resident Keifer Grimm, 23, said "I don't even think of it anymore" as he spent $20 for 5.1 gallons. "That's the shameful part of it. We continue to consume it without even thinking."

ronald.white@latimes.com

stephen.ceasar@latimes.com

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