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Could $4 gas be on the way? | Oil Watchdog

Could $4 gas be on the way?

Sat, Mar 31, 2007 at 1:43 pm

    Could $4 gas be on the way?

    Oakland Tribune
    March 31, 2007

    by Janis Mara, BUSINESS WRITER

    Just in time to mess up weekend getaways, gas prices tied a record high Friday in the San Francisco metro area — and the East Bay wasn’t far behind.

    The average price for a gallon of unleaded gas hit $3.36 — up 34 cents from a month ago — in the San Francisco metro area, which includes San Mateo County, according to AAA.

    In the East Bay, prices jumped to $3.26 per gallon, up 34 cents from a month ago, and the San Jose area saw prices increase to $3.24 a gallon, up 33 cents in the last month.

    The pain at the pump is particularly acute in California, which has the nation’s highest average gas prices. The Golden State’s average price for a gallon of regular unleaded is $3.23, while the U.S. average is only $2.64.

    Prices might continue to increase a penny or two more per gallon as the weeks go by, according to AAA spokeswoman Cynthia Harris.

    Jamie Court, president of consumer advocacy group the Foundation for Taxpayer and Consumer Rights, was even more pessimistic. "We have record San Francisco Bay Area prices in March, which means by summer we are heading toward $4 a gallon, if no one intervenes," Court said.

    Drivers around the Bay are all too accustomed to soaring gas prices and the accompanying hit to the pocketbook. But the increases also herald higher prices in other areas, such as groceries and other goods, some mo-torists noted.

    "Did I notice that gas prices are up? Did I notice that it rained Monday?" Ross Pytlik of Livermore asked rhetorically. He said he’s concerned because not only do the increases affect him directly, but "any time raw material or transportation costs increase, other items are going to go up."

    Indeed, "Almost three-quarters of every community in California is served exclusively by truck. So higher prices of fuel in some trucking sectors will have an effect on the price of goods in California," said Matt Schrap, regulatory specialist for the California Trucking Association.

    "I take the bus, but gas prices do affect me," said Alechia Robertson, who was enjoying Friday’s sunshine in downtown Oakland with her friend Alyssa Chhan of Berkeley. "Gas controls everything. Airline tickets and other goods will be affected."

    AAA’s Harris agreed, saying, "High gas prices affect the price of food, airfare, hotels, groceries, clothing — every kind of merchandise is trucked in from somewhere. It (higher prices) affects us on every level."

    Robertson said she thinks prices have gone up because of instability in the Middle East. Chhan said she thinks it’s supply and demand. According to Harris, they’re both right.

    "Refinery inventories are always low this time of year because they are switching from the winter blend of gas to the cleaner-burning summer blend," Harris said. This disrupts supply because refineries let their supplies of the winter blend of fuel decline in anticipation of replacing them with the summer blend.

    "Second, there have been problems at refineries around the country," Harris said, such as equipment malfunctions and a fire at a Texas refinery.

    Other factors include the price of crude oil, which surged Thursday to a six-month high of more than $66 a barrel, and the continuing tension in Iraq, Harris said.

    Harris urged motorists to shop around for the cheapest gas, saying prices can vary widely from station to station.

    To find the lowest gas prices in your area, visit www.aaa.com/gasprices or www.gasbuddy.com. Also, the California Energy Commission has a number of gas-saving tips at its Consumer Energy Center, www.consumerenergycenter.org.
    —————
    Contact Janis Mara at jmara@angnewspapers.com or (510) 208-6468. Read her Energy Blog at InsideBayArea.com.

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