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West Coast Gas Prices Lead the Nation

Prices Shoot Past $3 and Just Keep Climbing

By Joe Benton
ConsumerAffairs.com

March 30, 2007
Daily increases in gasoline prices are once again commonplace as the cost of regular self-serve seems on a one-way trip to $3 a gallon, eating into family budgets.

Across the country prices have increased for eight straight weeks. In California, AAA spokeswoman Carol Thorp said gas prices spiked over the last two months, with a gallon of regular, self-serve gasoline costing $3.21 on average, up from $2.82 a gallon a month ago.

A year ago, gas was $2.74 a gallon in the state.

Californians usually pay more for gas because cleaner-burning fuel blends mandated by the state cost consumers about 5 to 7 cents more per gallon.

Mike O'Connor is president of the Virginia Petroleum, Convenience and Grocery Association and he blames energy traders and Congress for higher prices. Congress eased regulatory oversight of energy and other commodities traders in 2002.

The people profiting from higher fuel prices are not the folks who run neighborhood convenience stores and filling stations, O'Connor said.

Dealers pay a 3 percent fee to credit-card companies on each transaction and that is higher than the dealer profit margins, according to O'Connor.

Oil industry analysts repeatedly blame the tightening of gasoline markets on a drop in production because of refinery shutdowns, both for unplanned and planned maintenance.

Refineries operated at 87 percent capacity last week, below pre-Hurricane Katrina levels in 2005. They produced 8.9 million barrels of gasoline per day, while the country has been consuming 9.2 million barrels per day, or 1.6 percent more than this time last year.

The U.S. has roughly a three-week supply of gasoline and a three-week supply of crude oil, according to government reports.

The tightening supplies and resulting price run ups are having the most severe impact on the West Coast according to the ConsumerAffairs.com Weekly Gas Price Round Up.

California: Soaring gas prices show few signs of letting up as a number of factors have contributed to the rising prices at California's pumps.

Gas prices are well above $3 per gallon, leading some residents, many of whom commute to work, to curb their spending on outings, at the grocery store and even on health care, according to reports in the state.

AAA spokeswoman Thorp said gas prices spiked over the last two months, with a gallon of regular, self-serve gasoline costing $3.21 on average, up from $2.82 a gallon a month ago. A year ago, gas was $2.74 a gallon.

Californians usually pay more for gas because the cleaner burning fuel blends mandated by the state cost consumers about 5 to 7 cents more per gallon.

Usually, the only state that surpasses California in gas prices is Hawaii. "This year, we even topped Hawaii," Thorp said.

"This is the time of year when refineries -- which manufacture gasoline from crude oil -- shift from a winter blend to a summer blend for clean air reasons," Thorp said. "Typically, during the change-over, the refineries have fewer supplies."

It's unclear when gas price increases will start slowing down, Thorp said. "There's an anxiety in the marketplace," Thorp said. "And a great deal of profit-taking."

Washington: Regular gas prices have hit $3 at stations throughout the state and will continue climbing, according to oil and travel industry experts.

Gasoline prices dropped to their lowest levels in nearly five months in February but now are steadily rising across the nation. The average Washington state price is up 25 cents a gallon since March 5 and 47 cents since February 2.

Prices at the pump in Washington are rising because a number of refineries have experienced production problems and consumer demand is squeezing already low gasoline inventories, according to Elliott Eki, a spokesman for AAA in Portland.

The average price for regular gasoline in the Longview-Kelso-Rainier area is $2.90 a gallon, according to AAA. Local gas prices last peaked at an average price of $3.07 a gallon in August.

Throughout March, gas stations have been switching from winter-grade gasoline blends to the more expensive and cleaner burning summer grade and the change over helped drive prices higher.

In West Virginia, the AAA Fuel Gauge Report estimates the average price of regular unleaded at $2.66. The price is $2.57 in Kentucky.

Some of the cheapest gasoline can be found for $2.41 at the Flying J Truck Stop in Catlettsburg, Kentucky.

Speedway gasoline stations had among the highest prices in the Tri-State. All of the company's Huntington's stations have prices above $2.71, and prices reached $2.79 in some parts of town.

In Ohio, Speedway stations were selling gasoline for $2.65 in South Point and Ironton. Speedway stations were also selling gasoline for $2.65 in Ashland.

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