Gas prices soaring State: Average price is $1.93 per gallon and is sure to rise, experts say.

www.presstelegram.com214741198150,00.html Article Last Updated: Saturday, February 22, 2003 - 8:04:09 PM PST By Andrew Blazier, Staff writer

Bolstered by consumer fears of a looming war with Iraq and national and global supply shortages, gas prices statewide are surging even higher.

Prices hovered anywhere from $1.90 to $2 per gallon Saturday at many Long Beach area stations.

A gallon of regular unleaded self-serve gasoline cost Californians $1.93 on average the highest in the nation. Drivers in the Los Angeles area paid an average of $1.89 for regular unleaded, up 25 cents from the previous month and 59 cents from February 2002, according to the Auto Club of Southern California.

"It's ridiculous,' said John Flores, 18, of Covina, after spending $1.82 per gallon at an ARCO. "You put in $5 and you barely get two gallons.'

He said it would cost him $40 to fill up his Mitsubishi Montero Sport.

A man who buys bulk fuels for Cosby Oil Co. in Santa Fe Springs said prices are bound to go even higher.

"Everything's kind of changing for the worse for the consumer,' Bob van der Valk said. "I see it shooting right by $2. We won't even blink an eye this time.'

Worried the global supply of crude oil might fall quickly if the country goes to war, the nation's oil companies bought up existing supplies rapidly. The hurried buying has driven crude prices up 19 percent since the start of the year to $36.79 per barrel.

About 40 percent of the retail cost of gasoline is attributed to the price of crude oil, according to John Cogan, energy information specialist for the Energy Information Administration in Washington, D.C.

Alaska North Slope crude, which makes up 20 percent of California's supply, reached $36.81 per barrel this week, up from $30.55 per barrel on Jan. 2, according to the California Energy Commission in Sacramento.

Besides war, global supply has been hurt by a two-month oilworkers' strike in Venezuela and a minor strike in Nigeria.

Within California, oil supplies have dropped about 6 percent, as refineries transition from fuel containing additive MTBE to fuel that uses cleaner-burning ethanol instead, van der Valk said. The majority of the state's gas companies plan to begin the switch by March 15, which could affect prices until October, when supplies return to normal.

"In our industry, it seems like bad news comes in threes,' he said. "You've got a recipe for disaster.'

Oil supplies weren't helped Friday. A massive explosion at an ExxonMobil Corp. oil storage facility in Staten Island, N.Y., pushed crude oil prices up more than a dollar in trading Friday. Heating oil and gasoline futures also surged.

"The most important factor is the price of crude oil on the world market,' said Rob Schlichting a commission spokesman. "That's a direct result of war fears and the country's Mideast policy.'