State’s gasoline prices at new high;

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The average rises to $3.461 as refineries continue to struggle with production.

Los Angeles Times

Retail gasoline prices in California jumped a dime to a new high of $3.461 a gallon during the last week as the national average came close to a new record, the Energy Department said Monday.

There appeared to be no relief in sight with the start of the traditional summer driving season less than a month away and refineries struggling to regain normal production levels.

“Demand has been unrelenting and refineries continue to be offline,” said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago. Production problems “are getting as regular as the sun coming up in the morning.”

Over the weekend, average prices in two more states crossed the $3-a-gallon mark, bringing the total to 22, according to the AAA national fuel gauge report, which uses numbers compiled by the Oil Price Information Service in New Jersey.

In California, which has the nation’s highest retail price, one consumer advocacy group urged Gov. Arnold Schwarzenegger and the Legislature to convene a special session to investigate.

“If oil companies won’t make enough gasoline to allow prices to moderate, and if they can’t keep their refineries running properly, they need more oversight,” said Judy Dugan, research director of the Foundation for Taxpayer and Consumer Rights in Santa Monica.

Joe Sparano, president of the Western States Petroleum Assn., said that oil companies weren’t to blame for the price run-up. He attributed the increase to growing strain on California refineries that struggle to meet swelling fuel demand in the state as well as in Nevada, Oregon and Arizona.

“All of those factors working together create a challenge for the industry and for consumers,” Sparano said.

The average price of a gallon of self-serve regular in California rose 10.2 cents above last week’s record of $3.359. The latest average, $3.461 a gallon, was 12.9 cents higher than a year earlier, according to the government’s weekly survey. Nationally, the average price rose 8.3 cents to $3.054, just short of the record of $3.057 a gallon set in September 2005 and 14.5 cents above the same week last year.

The biggest jump, 14.9 cents to $3.074 a gallon, came in the Midwest, where motorists such as insurance underwriter Victoria Thomas say they have done all they can to cut back. Thomas’ car gets 33 miles a gallon and she lives just minutes from work.

“There is nothing else I can change. It’s not like I can call my employer and say, ‘I can’t afford to come to work today,’ ” Thomas said.

Price relief may not be arriving any time soon, said Antoine Halff, head of energy research at Fimat USA Inc. European refiners are producing more diesel fuel this year to meet rising demand, leaving less gasoline for import to the U.S.

But others saw a glimmer of relief, noting a drop in wholesale gasoline prices.

“It certainly implies that you may see some prices back off a bit,” said Tom Kloza, chief oil analyst for the Oil Price Information Service.

With refineries running at less than capacity, a glut of oil helped drive down crude prices Monday. Oil futures for June delivery fell 46 cents to $61.47 a barrel.
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