Rapidly rising gas prices fuel motorists' suspicions

Sharpest increase in Calif., as average price of regular tops out at $1.58 per gallon

April 11, 1999|By NEW YORK TIMES NEWS SERVICE

LOS ANGELES -- Ira J. Feldman finished filling his Mazda with gasoline, eyed the readout on the pump and raised his hands, arms wide, as if to say, "You've got to be kidding." At $1.59 a gallon, he had just paid $21.56 for 13 gallons of gas.

"What a joke," Feldman, a 51-year-old home restorer, said. "What's the excuse? They're telling us there's a war? The chairman of the board had a bad meal last night? I don't get it."

Although gasoline prices around the country have increased over the past several months, in part because of announced cuts in worldwide oil production, prices in California have soared the most, with the sharpest increases in the past two weeks.

The average price for a gallon of regular unleaded gasoline in California this week was $1.58, up from $1.11 in late February, when fires and production problems at refineries in the state, coupled with the overall increase in crude prices, began to drive up the price. Nationwide, the average is about $1.10.

California, with 25 million registered vehicles, consumes a million barrels of gasoline a day.

The high prices leave some drivers wavering between anger and resignation.

"Oh, they're astronomical, Jonni Mae, 46, a business owner, said of prices after paying $9 for five gallons of super-unleaded gas. "I have to spend the money. But I hate to spend the money."

A fire at a Tosco refinery in the San Francisco Bay area on Feb. 22 and another at a nearby Chevron refinery one month later are blamed for part of the price increase. The fires, along with other distribution problems, caused a 15 percent drop in production.

California's government requires use of a less polluting, oxygenated blend that is rarely produced elsewhere, making it difficult to import gasoline during shortages.

The 15 percent drop in production, which has since been more than corrected, has led to a 30 percent retail price increase on regular unleaded. As a result, Sen. Barbara Boxer, a California Democrat, asked the Federal Trade Commission in a letter March 31 to take action to ensure fair competition and keep prices down.

John Lichtblau, an analyst for the Petroleum Industry Research Foundation, which is financed by the industry, said gasoline companies were not taking advantage of events.

"That's the way the market works," Lichtblau said. "When production is down, prices can temporarily increase disproportionately. Basically, what you have is an unusual shutdown of normal refinery operations in one single market."

But drivers remain suspicious.

"I think somebody just wants more money in their pocket," said Robert Arias, a 39-year-old construction worker from Victorville. "I mean, people are going to have to buy it, no matter what."

Arias was filling his pickup, which gets 16 miles to the gallon, for the second time yesterday. "Don't have much of a choice," he said. "It's either pay it, or stay home."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.