The worst-ever one-week spike for California gasoline may be over, for now. Prices dropped by an average of 0.5 cents a gallon overnight, to the still stunning level of $4.666.
A week ago, the average price for a gallon of regular gasoline was $4.232. That was already a record for the day, according to the AAA Fuel Gauge Report, which tracks prices from the Oil Price Information Service (OPIS) from more than 100,000 retail outlets.
Then things went "apoplectic," in the words of Tom Kloza, chief oil analyst for OPIS.
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A sudden concern about fuel supplies caused some traders to hold onto what they had, and buy more, perhaps, than they needed, one economist said. Those whose supplies were running out had to bid high to get more.
Some gas stations charged nearly $6 a gallon. Other stations closed rather than buy gas at a premium price that might force them to sell at a loss if the market collapsed. Fifteen Costcos suddenly shut down their pumps.
A fuel prices expert thinks he might have part of the explanation.
A spate of refinery problems cut the state's gasoline supplies by "122,000 barrels, or 2.1%, to 5.77 million in the week ended Sept. 28. That was down 10% from a year ago and the lowest inventory level for that period since 1999," said Bob van der Valk.
Gov. Jerry Brown stepped in to allow refiners to process cheaper winter blend fuel three weeks earlier than normal. The state's two U.S. senators--Dianne Feinstein and Barbara Boxer--want the Federal Trade Commission and the Justice Department to investigate.
Consumer advocates, meanwhile, scoff at the idea that prices might fall quickly to give Californians some much-needed relief.
"Forget all those sanguine forecasts for lower prices," said Charles Langley, public advocate for the Utility Consumers' Action Network in San Diego. "We saw prices drop 0.5 cents last night. Well, rooty-toot-toot. But you can expect them to stay firm."
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