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Average California gas prices surge, top $4 a gallon in L.A.

California gasoline prices on average jumped 23 cents in the last week, passing $4 a gallon in Los Angeles, fuel surveys show.

February 05, 2013|By Ronald D. White, Los Angeles Times
  • Freddy Lozoga fills an underground tank at a service station in Los Angeles. The average price of regular gasoline jumped 23 cents in Southern California in the past week as refineries trimmed production because of maintenance.
Freddy Lozoga fills an underground tank at a service station in Los Angeles.… (Nick Ut / Associated Press )

Average California gasoline prices jumped 23 cents in the last week, passing $4 a gallon in Los Angeles, fuel surveys show.

This surge follows a year in which the nation's motorists spent a greater percentage of their annual income on gasoline than at any time in the last three decades, the Energy Department said. Gasoline expenditures were higher despite a sharp improvement in automobile fuel economy, according to a separate report.

The average cost for a gallon of regular gasoline in California jumped to $3.914 on Monday, up 23.4 cents from a week earlier, according to the AAA Fuel Gauge Report. The Energy Department reported a similar increase for California of 22.8 cents a gallon, to $3.904, in its separate price survey.

Refinery maintenance was one reason for the surge, said Denton Cinquegrana, executive editor of the Oil Price Information Service.

"California has a lot more planned refinery maintenance than it usually has at this time of year," Cinquegrana said. "And most of that is concentrated in Southern California."

Los Angeles County, for example, averaged $4.017 a gallon Monday, up 24.8 cents over the last week, the AAA report said.

Auto Club spokesman Jeff Spring said gasoline traders play a role.

"Big investment money is flowing earlier and earlier into gasoline trading, ahead of the usual spring spike," he said. "Southern California is a particularly vulnerable market for shortages because it has no inexpensive alternatives if local refinery production is down, and traders are aware of this."

But California is not alone. In the Midwest, prices jumped 22.8 cents over the last week, according to the Energy Department. That helped drive the U.S. average for a gallon of regular to its highest average ever for this week, up 18.1 cents to $3.538 a gallon.

In 2012, Americans paid a record average of $3.618 for a gallon of regular gasoline, up from $3.521 in 2011, according to the Energy Department. The 2011 average was also a record and a whopping 73.9 cents a gallon more than in 2010.

The Energy Department says U.S. households spent an average of $2,912 on gasoline in 2012, or almost 4% of their pretax income, the highest percentage in 30 years.

"The effect of the higher prices in 2011 and 2012 outweighed the effect of reduced consumption," the Energy Department said.

In fact, researchers at the University of Michigan said Monday that the average fuel economy for new vehicles sold in the U.S. reached a record 24.5 mpg in January — up 0.4 mpg from a revised figure for December.

Meanwhile, the Union of Concerned Scientists reported that most Americans "are likely to spend almost as much on gasoline over the life of their vehicle as its original cost."

"You're basically paying for a second car every 15 years. The only thing really benefiting from your oil use is oil companies' bottom line," said Joshua Goldman, the report's author and a policy analyst for the advocacy group.

High and volatile fuel prices have fractured brand loyalty, with customers willing to switch if the price is right, according to a survey by NPD Group.

The NPD Group survey of 3,740 U.S. consumers found that nearly 60% would switch brands if they saw a price difference of 10 cents or less a gallon. Only 9% said they wouldn't buy another brand no matter the price.

"Clearly fuel discounts are a game-changer in today's market," says David Portalatin, motor fuels industry analyst for the NPD Group. If gasoline brands expect to hang onto their customers, he added, "it is imperative that they create value for the consumer in some aspect of the purchase occasion — whether price, quality, rewards, or some other attribute."

ron.white@latimes.com

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