North County Times (Escondido, California)
With the arrival of Labor Day weekend, North County residents are wondering how much of their toil will be necessary to pay for their next tank of fuel.
Hurricane Katrina‘s disruption of oil deliveries and refinery production along the Gulf Coast are blamed for a spike in prices nationwide, even though there is no shortage in California.
That didn’t stop gas prices from hitting record highs in this region Thursday. The average price for a gallon of regular unleaded in the San Diego region was $ 2.89. One month ago, the average price was $ 2.62. On Sept. 1, 2004, it was $ 2.13.
The cost of a gallon of regular unleaded was surpassing $ 3 at many North County gas stations, with one prediction it will reach $ 3.20 by this time next week.
On Wednesday, the most recent increases led the San Diego-based Utility Consumers’ Action Network to call for an investigation into whether state oil companies are capitalizing on Katrina and engaging in profiteering.
For the immediate period, there is no certainty on where gas prices will end up or when the almost daily increases will stop.
Equally uncertain is how much the next tank of gas will cost motorists on the eve of a three-day weekend — an end-of-summer holiday that traditionally involves a lot of driving.
The prospect of continuing price hikes coupled with television footage of gas lines in the South and scattered reports of $5- and $6-a-gallon gas may be feeding a psychology of fear, sending motorists rushing to the pumps and increasing demand.
In Escondido on Thursday morning, Annette Sanchez fished through her purse and pockets, rounding up extra dollar bills before heading to the cashier to prepay at the EZ Gas station on Washington Avenue.
“I don’t have time to drive around and find the best price, but I thought I’d better get as much gas as I can before it goes up even more,” the 29-year-old Escondido resident said. “Who knows how much it’ll be tomorrow?”
That uncertainty was reflected in an Associated Press poll released Thursday that shows Americans want the president and Congress to put gas prices at the top of their domestic policy agendas.
Lack of supply is not an emergent problem in Southern California or the rest of the state, according to fuel industry sources and state regulators, although refinery disruptions have occurred of late.
“There are no supply problems,” said Rob Schlichting, a spokesman for the California Energy Commission in Sacramento. “There is a tighter market because of some refinery problems, but no one is running out of gas.”
California is the fourth-largest oil production area in the United States, turning out nearly 2 million barrels a day.
The Energy Commission put last week’s California refinery gasoline production at 8.2 million barrels, a reduction of only 1 percent compared with the same one-week period in 2004.
Elaine Beno, a spokeswoman for the Automobile Association of America in Southern California, said the reasons behind this week’s increases in the Golden State are unclear.
“We are already seeing some stations dramatically raise their prices, which could be for a variety of reasons,” she said. “The bottom line is that they are a business and they can raise their prices if they think their costs are going to go up.”
Retailers set the price they want to charge based on their expectation of what they will pay for their next load of fuel.
Schlichting said the increased demand that occurs every three-day weekend is in part to blame for escalating prices. The commission had anecdotal reports of gas lines around the state Thursday, but those stemmed solely from people shopping for the best price, he said.
Some of the 12 percent of finished gasoline product that California imports will likely be diverted to the Gulf region, which could further increase gas prices here, Schlichting said.
Joseph Kempka transports patients to and from Encinitas twice a day for Tri-City Medical Center in Oceanside. He fills up a small bus at an Emerald Drive service station in Vista every day.
“It definitely hurts us at the hospital, and it hurts me personally, too,” the Vista resident said. “I really have to think about where I’m going now, and try to do as much as possible in one trip.”
Gary Currey’s humor was intact, despite the high cost of filling up his SUV.
“If this keep up, I’m going to have to ride a tricycle to work,” the Oceanside resident said. “I would like to consider public transportation, but it’s just not reasonable because I have to take the kids to school.”
A 76 station on Escondido Avenue along Vista’s Postal Way was selling a gallon of regular unleaded for $ 2.91.
Oceanside’s Rick Decroix was there topping off his tank and blaming oil companies and not Mother Nature for the latest rise in prices.
“I don’t think what’s happening here has anything to do with the flooding in Louisiana,” he said. “I think it’s profiteering.”
At the Main Street Gas and Snack in Fallbrook, station manager Vern Bateman said he has heard grumbling from some motorists.
“Customers seem to accept what’s going on, but I understand people need someone to take it out on.”
Not so calm was Sara Saldivar, who was angry at the oil companies.
“These prices are absurd,” she said as she filled her tank in Bonsall. “The companies are taking full advantage of the war in Iraq and the hurricane and are jacking up the prices.”
At the 76 station at East Valley Parkway and Citrus in Escondido 36-year-old John McDaniels said he was relieved to find the price of regular unleaded was $2.84.
“This (price) is not too bad,” he said. “Of course, ‘not too bad’ is a relative thing. Two weeks ago, I passed up a station that was selling it at $2.79 cause I thought that was too high.”
The east and west sides of La Costa Avenue at Interstate 5 were a study in contrast just before 8 a.m. Thursday.
Just east of the freeway, a few were waiting for their rides in a car-pool lot that was half full. On the west side, a steady stream of motorists were pumping gas.
“This is typical,” said Carlsbad resident Wayne Cline as he looked at the lot’s empty parking places.
He and two co-workers have been carpooling to Mira Mesa each day for a year. Whenever a gallon of fuel crests over $ 2.50, it’s worth pairing up with other people, Cline said.
Pointing to the Chevron gas station across the freeway, where the cheapest gas was $2.89, Cline called the latest price spikes “ridiculous.”
Across the freeway, Leucadia resident Warren Dennis shook his head as he dropped a pair of $20 bills to pay for 14 gallons of gas. Dennis works for a developer and his itinerary included Ontario.
“I’m questioning whether $ 40 will get me there round trip,” he said.
At Dan’s Oceanside Gas, owner Bob Schroeder ran out of “super” Wednesday morning, the last of his supply, and decided he wouldn’t buy any more.
“The price for us, it’s just increasing too much,” he said. “It’s been skyrocketing.”
Independent, unbranded gas stations purchase fuel on a different scale than name-brand stations, he said. “We’re the first to go up.”
Schroeder is selling his South Coast Highway station, in large part because of the increase in fuel costs, he said. The new owner is scheduled to take over in two weeks. Until then, the pumps will be dry.
“I could have bought gas this week,” he said. “It just went up too much, I said forget it.”
Michael Shames, executive director of the Utility Consumers’ Action Network, said Thursday the run-up in prices suggest something is afoot.
“There are only two possibilities for what is going on,” Shame said. “One is the number of reported refinery outages in the state, which hasn’t been fully explained. The only other is that we are now exporting fuels, causing the wholesale market to be starved.”
Besides calling for an investigation by energy regulators, he also is seeking a halt to out-of-state sales.
“The state can stop the export of fuel out of this market and demand an accounting,” he said. “That could effectively stem what is going on and get prices back down to where they should be.”
If those things don’t happen, Shames said the sky is the limit for gas prices.
The Energy Commission had no immediate response to the call for an inquiry.
Shames said his group is convinced that prices for a gallon of unleaded gasoline will reach $ 3.20 shortly after Labor Day.
Feeding the speculation of profiteering was a report issued Thursday by another advocacy group, the Foundation for Taxpayer and Consumer Rights California. That report claims profiteering and government failure to respond were responsible for the rise in gas prices in California in the months leading up to Hurricane Katrina.
It contends that gas prices jumped an average of 65 cents per gallon between Jan. 17 and April 18 and that refinery profits in the same period increased 61 cents per gallon.
Staff writers Barbara Henry, Louise Esola, Anne Riley-Katz, Andrea Moss, Lorell Fleming and Adam Kaye contributed to this report.