The price surge that has California drivers paying more than $4.60 a gallon
for regular unleaded gasoline has been a "double whammy" for Oak View resident
Suzanne Farmer.
Farmer, the owner of a mobile dog grooming business, has spent about $200
to fill her tank in the past week, about double what she normally spends to
keep her converted van running.
"Because of the bad economy, we've had to drive even farther to keep our
business up and get more customers ... but now with these prices, that's
causing us to lose money," Farmer said Monday. "I just got enough gas today to
get me through maybe another day or two. It's really outrageous, and it's
definitely hurting my business."
The state Air Resource Board on Monday approved a plan to switch to
winter-blend fuel early, as the statewide average price of regular gasoline
rose to an all-time high, the third record-setting day in a row. Gov. Jerry
Brown ordered the switch Sunday.
Some industry analysts say prices have plateaued and could drop 25 cents
by the end of the week, though they're not expected to return to more stable
levels for at least two to three weeks as supply issues continue.
Denton Cinquegrana, senior West Coast market editor for the Oil Price
Information Service, said drivers should see a reprieve from increases but
that prices will not fall significantly until at least the end of the month.
"You are not going to see prices change overnight, but this does speed up
the process," Cinquegrana said. "Between Halloween and Election Day, we will
probably see prices go back to where they were before the spike happened."
Factors that contributed to the increase included a power outage at an
ExxonMobil refinery in Torrance.
ExxonMobil spokeswoman Rachael Moore said late last week that the
refinery had resumed normal operations and would be able to meet all of its
contractual commitments.
Winter-blend gas typically isn't sold until after Oct. 31. Few refineries
outside the state are producing summer-blend gas, putting pressure on
California manufacturers.
California motorists now pay among the highest prices in the nation,
spending an average of $4.67 per gallon Monday for regular unleaded gas,
according to the Southern California Automobile Club. Hawaii came in second at
$4.41 per gallon followed by Alaska at $4.16 per gallon.
In Ventura County, the average price was $4.69 on Monday, up 51 cents
from a week ago.
Patrick DeHaan, senior petroleum analyst at GasBuddy.com, predicted the
average price could peak as high as $4.85 a gallon.
Sen. Dianne Feinstein, D-Calif., has called on the Federal Trade
Commission to investigate the increase, saying residents need to be protected
from "malicious trading schemes."
In a letter Sunday, Feinstein asked the FTC to determine whether the
price spike was caused by illegal manipulation of the market and to start
monitoring the market for fraud, manipulation or other malicious trading
practices.
"Publicly available data appears to confirm that market fundamentals are
not to blame for rising gas prices in California," she wrote.
Despite a pipeline and refinery shutdown, state data shows gas production
last week was "almost as high as a year ago, and stockpiles of gasoline and
blending components combined were equal to this time last year," she said.
In some areas in the state, independent gas stations raised their prices
to $5 or more, while some purposely shut down pumps.
Meanwhile, some business owners are absorbing costs related to the price
increase.
Ted Guglielmo, owner of Monterey-based Pacific Rim Fisheries, a company
that packages squid caught off Point Mugu and the Channel Islands, said his
transportation costs have increased 5 percent to 10 percent since the gas
price surge.
His company runs about seven of its own trucks and contracts about eight
additional big rigs that run on diesel.
Suppliers of such items as plastic gloves, plastic wrappers and packing
boxes have tacked on additional charges, costing his company an extra $14,000
in supplies and transportation costs this past week alone, Guglielmo said.
"Some of these companies are charging you extra because they are trying
to offset the cost of their fuel," Guglielmo said. "If gas prices continue to
go up, I'm going to have to renegotiate with them."
Rudy Rehbein, general manager of New-Indy Containerboard LLC in Oxnard,
said the company has had to absorb a 10 percent to 12 percent increase in
transportation costs because of the gas price increase.
The company, which each day makes 600 tons of corrugated boxes and paper
goods for packaging, has about 35 trucks that bring raw materials to the
Oxnard facility and 35 rigs that transport products for delivery along the
coast and in Arizona.
For small-business owners like Farmer, who depend on their vehicles,
further price increases will mean having to decide whether to pass the cost on
to customers.
If gas prices continue to climb, Farmer may have to start charging
clients $5 more for dog grooming services.
"I might not have a choice," she said.
This article contains material from The Associated Press.
Distributed by MCT Information Services
