Gas prices go into overdrive

Published on

Santa Barbara News-Press (California)

Gasoline prices hit a record Friday across most of Southern California, including Santa Barbara County, where drivers pumping regular grade paid an average of more than $3 per gallon — and even $4 a gallon was spotted at one station.

The county’s average gas price for regular self-serve rose to nearly $3.12 a gallon on Friday, surpassing the former record high of $3.11 set on Sept. 7 last year, according to the Automobile Club of Southern California.

Drivers buying gas in the county are paying 11 cents more on average than they were last week and 32 cents more compared to a month ago. Last year at this time, the average price was 39 cents lower per gallon for regular, self-serve unleaded.

“Investors have been climbing a wall of worry because of uncertainties about political instability in Iraq and saber-rattling in Iran. Those worries have sent crude oil futures to record levels and gasoline has followed,” said Carol Thorp, spokeswoman for the Auto Club.

In fact, crude oil shot above $75 a barrel Friday, closing at $75.17 a barrel for light, sweet crude. That was up 8.4 percent from Thursday alone, and more than 40 percent higher than a year ago.

“Motorists can expect two to three more weeks of price increases that could send the average price of regular gas as high as $3.10 to $3.20 per gallon,” Ms. Thorp added.

The nation’s refining capacity still has not reached the levels achieved before Hurricane Katrina. Also, some areas of the country are facing refining problems that have further reduced the supply of gas, the Auto Club explained.

Refineries are required to make a summer blend of fuel that uses ethanolinstead of the additive MTBE. In some cases there has not been enough ethanol to meet refiners’ needs. The pressure on supply combined with an increase in demand for gas this year has pushed prices to record highs.

In this state, for example, according to the California Energy Commission Weekly Fuels Watch Report, refineries produced 10 percent less gasoline and diesel for use in the state last week compared to a week earlier; production was down 9 percent compared to a year earlier.

One statewide group, the Foundation for Taxpayer and Consumer Rights, on Friday called for the governor and Legislature to consider public regulation of refineries and to return “windfall profits” to consumers via a rebate.

Prices at well above $3 a gallon are now a common sight throughout Santa Barbara County. Arco stations in Santa Barbara, known for offering among the lowest prices in town, were touting $2.99 a gallon for regular unleaded Friday. In Santa Ynez, near the Chumash Casino, regular self-serve was $3.31 a gallon at a 76 station.

By comparison, the national average price is $2.86, according to AAA.

A Mobil station on State Street in the wealthy Upper Eastside neighborhood showed a price of more than $4 a gallon for those who wanted super unleaded with full service. The station’s self-serve regular gas was $3.27 a gallon.

“The customers who come here wanting full service and premium gas don’t really care too much about the price,” said Santa Barbara resident Jose Jaramillo, an attendant at the station. “Most of them are regular customers.”

“In this neighborhood, we have lots of people who drive Mercedes, Porsche and other expensive cars and they need to put premium gas in their cars. And many of
them use full service even if the price is 60 cents higher than self-serve,” he added.

Santa Barbara resident Jeffrey Sipress was among those who pulled into the Upper Eastside Exxon station Friday.

“I’ve noticed that prices have been going up in the last week, and it’s had a little impact on me,” he said as he pumped super unleaded gas at $3.45 a gallon into his BMW.

“I’m driving a little less,” he added. “But I live in Santa Barbara and I work here, so fortunately I don’t have to drive that much.”

Consumer Watchdog
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