Sacramento Gas Prices Top Bay Area, Los Angeles

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Sacramentans and their Central Valley cousins along Highway 99 have
reason to feel stressed at the gas pump: They’re paying Bay Area gas
prices – and, for the moment, more than drivers in Los Angeles.

What gives?

starters, say analysts, there’s always a bit of mystery to gasoline
pricing – it’s based, among other things, on a mixture of crude oil
prices, how efficiently the refineries are running and the level of
competition, what experts call "nozzle count."

Yet there’s no
mystery in the numbers lately. The dependable pattern of cheaper
gasoline in the Valley has vanished, at least temporarily.

to AAA, the average price of a gallon of self-serve unleaded climbed to
$4.41 in Sacramento on Friday. In Stockton, it was just a bit above
$4.41, just two weeks after passing $4. In Fresno, drivers averaged
$4.45 a gallon – four cents higher than in San Francisco.

Meanwhile, Los Angeles drivers are paying $4.38, AAA says. And the statewide average was $4.40.

figures highlight the dramatic financial roller coaster ride that
consumers are on. Explanations for such sudden volatility in a state
that produces only 39 percent of its own oil aren’t easy to come by.

this is all such a mystery, it’s one of the reasons people are so
angry," said Judy Dugan, research director and oil specialist at
nonprofit Consumer Watchdog, a statewide advocacy group based in Santa

Some analysts attributed the rise of Sacramento prices
beyond those in Los Angeles to Southern California’s brutal competition
and high nozzle count – so many gas pumps they often appear to be on
every corner.

"It’s the number of pumps," said David Hackett,
president of Irvine-based Stillwater Associates. "Everything else being
equal, that’s the decider."

That limits profits for the owners of the gas stations, experts say.

L.A. the margins are very, very, very tight," said Fred Rozell, retail
director at Maryland-based Oil Price Information Service.

uses data from Rozell’s company for its daily pricing report, including
a count of 400 gasoline pumps inside the city of Sacramento.

pointed to the lower-priced Arco stations that dominate Southern
California. He also noted an abundance of retailers that sell
marked-down gasoline, such as Costco and Safeway.

By contrast,
Sacramento and other cities along Highway 99 lack the dense population
and increased competition that brings, both said.

As business
costs rise, cities like Sacramento also have fewer independently owned
stations that compete with lower prices, said Richard Stockton,
director of transportation for West Sacramento-based Ramos Oil Co. The
gasoline wholesaler supplies both independent and corporate stations.

Los Angeles didn’t always have the advantage, though.

a year ago Sacramento drivers were easily the envy of those in the
state’s coastal cities. Area drivers paid on average nine cents a
gallon less than in Los Angeles and 30 cents less than in San Francisco.

that advantage disappeared last month. Sacramento gasoline was a penny
higher than in Los Angeles and just 10 cents less per gallon than in
San Francisco.

Some state officials believe the Valley’s worsening price disparity is temporary.

don’t think this is a long-term issue," said Susanne Garfield,
spokeswoman for the California Energy Commission. Garfield said it may
reflect increased costs of trucking more fuel to the Valley from Bay
Area refineries.

"It probably has to do with terminals and
pipelines and trucking in extra loads," she said. "It’s just
speculation, but (a spike) is usually an indication of that."

Stockton of Ramos Oil agreed that the usual gap should recur soon.

"There’s usually an eight- to 10-cent difference between the Bay Area and us," he said.

don’t expect the experts to be able to tell us where it’s all headed –
especially on a day when oil futures jumped nearly $11 a barrel and the
major stock market indexes slumped 3 percent.

"It’s very hard to
predict that," said Cynthia Harris, spokeswoman for AAA in Northern
California. "It’s very volatile right now.

Contact the author at: [email protected]

Consumer Watchdog
Consumer Watchdog
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