Southern California drivers continue to feel the pinch as gas pump prices have
increased for nearly a month, reaching well above the $4 mark in some areas.
Ventura County drivers paid an average of $4.27 per gallon for regular unleaded gas Tuesday, up 11 cents from a week ago and 46 cents from a month ago, according to the Southern California Automobile Club fuel gauge report.
Industry analysts said the annual switch to cleaner-burning "summer blend" gasoline combined with maintenance at refineries have contributed to the price spike.
While price increases are expected during the annual switch, the spike came much earlier this year, said Denton Cinquegrana, West Coast markets editor at the Oil Price Information Service in New Jersey.
"Prices have gone up quite a bit in the last month, but since that timeline has been pushed up sooner, I do think we are a lot closer to peaking now," Cinquegrana said. "California is an island onto itself, and retail prices usually peak much earlier there than rest of the nation."
California motorists Tuesday paid the second highest prices in the nation, an average of $4.17 per gallon. Hawaii had the highest average, $4.28 per gallon, and New York came in third at $3.99 per gallon.
Petroleum industry analyst Bob van der Valk said at least five refineries in California have been partially shut down for maintenance.
Oil prices have been rising since mid-December, when oil traded around $87 per barrel. Analysts said investors also have bought into oil markets speculatively in recent weeks on the hopes for a stronger recovery in the global economy.
The price of oil rose slightly Tuesday, continuing a run-up that began two months ago. Benchmark crude for March delivery increased 80 cents to close at $96.66 on the New York Mercantile Exchange.
While prices have been climbing for nearly a month, analysts said there are signs that the price increase could be reaching its peak.
Ventura County prices fell 0.2 cent Tuesday. While not a significant drop, it could signal a slow turnaround, said AAA spokeswoman Marie Montgomery.
"Although one day does not make for a trend, it is a good sign that prices might have peaked," Montgomery said.
This year, the biggest spike in wholesale prices happened last month when the average price was $2.74 per gallon Jan. 22 and jumped to $3.34 per gallon Jan. 31, Montgomery said.
"Ever since then, we have been trying to catch up on the retail end and have actually surpassed it now that we are above $4," Montgomery said.
Sam Seng, owner of Fred's Gas and Food on Saviers Road in Oxnard, said continuing increases have hurt his profits. As an independent gas station owner, however, Seng's prices are lower, at $4.09 per gallon, than name-brand sellers.
"The prices are so high right now, so we try to just keep it low for our customers and to stay in business," Seng said. "We are busy, but we will only make back our money when the prices finally go down."
Meanwhile, name-brand sellers have had to increase prices more than 20 cents just to keep up with costs.
Joe Kassar, who operates Mills & Mobil in Ventura, said higher delivery prices have forced him to raise the price of regular gas to $4.49 per gallon.
"When they switch to the summer blend, we always see an increase, but that increase is usually much less and for a shorter period of time," Kassar said. "This has been going on for almost a month now, and it's way too much. Sometimes there is just no valid reason why consumers have to pay the extra price while these oil companies continue to make record profits every year."
Pending any major refinery issues or other interruptions to the global supply, prices should level off and start to decline in the next few weeks, van der Valk said. They should stay in the $4 range through the summer, he said.
"Prices are already starting to come down this morning, so that's a good sign," van der Valk said. "I think we have hit the top, but as it always goes ... prices shoot up like a rocket but fall down slowly like a feather."
This story contains information from The Associated Press.
Distributed by MCT Information Services
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OCTOBER 30, 2014
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