Big jump at the pump again - GAS UP 10 CENTS TUESDAY TO $2 A GALLON AT MANY STATIONS - Motorists are learning to dread Tuesdays.

www.bayarea.com Posted on Wed, Feb. 26, 2003 By Gary Richards Mercury News

For the second time in two weeks, gas prices jumped a dime a gallon on a Tuesday, eclipsing $2 at a growing number of Bay Area stations. The average cost for a gallon of self-serve unleaded is now at its highest level in nearly two years, going for $2.11 in San Francisco, $2.01 in Oakland and Santa Cruz and $1.99 in San Jose, according to a daily survey by the California State Automobile Association.

Those figures are about 70 cents higher than a year ago, and pennies shy of records.

The numbers are sending motorists scurrying to those few stations still listing gas under $1.90 a gallon -- a price that seemed exorbitant two months ago but now passes for a bargain.

No cars were in line at a Shell station listing its cheapest blend for $2.19 a gallon at Lawrence Expressway and Saratoga Avenue in West San Jose on Tuesday morning -- 10 cents higher than Monday. But 17 cars waited in line at two discount stations on McKee Road in East San Jose near Highway 101, where the price stood at $1.82.

I used to go almost anywhere for gas,'' said David Tabuchi of Pleasanton, a survey technician at Underwood and Rosenblum, off Brokaw Road in North San Jose. But once it went over $2, I said forget it. I'm shopping around.''

Oil analysts are split on where prices will go from here.

Some say they'll leap an additional 50 cents a gallon if war erupts in Iraq. Others believe that if the the civil unrest in oil-producing Venezuela eases, and temperatures warm up in cold-climate regions, depleted inventories will rise and prices will level off.

Most experts, though, are just as puzzled as drivers watching the numbers spin faster and faster at the pump.

There is a lot of uncertainty right now and the prices we see are a direct result of that,'' said Severin Borenstein, director of the University of California-Berkeley Energy Institute. My best guess is that although prices are high, they're calming down.

``But if war starts and it goes badly, prices will go up.''

Prices rose 30 cents a gallon in 1990 after Iraq invaded Kuwait, and then dropped 30 cents in 1991 when the Persian Gulf War ended.

While some officials say oil companies are gouging motorists, industry watchers point to a litany of reasons behind the rapid rise in prices.

• Oil inventories are at their lowest levels since 1975. The United States has about 265 million barrels in storage, just below the level needed to guarantee a smooth flow of oil.

• The price of crude oil, which accounts for nearly half of the cost of a gallon of gas, rose to more than $36 a barrel Tuesday, an increase of about 25 percent since Christmas. Oil prices have not reached such levels in more than a decade, when the United States was about to oust the Iraqi troops that had invaded Kuwait.

• A 78-day strike in Venezuela has temporarily turned that oil producer into an importer, reducing worldwide supplies 4 percent.

• A cold winter in the United States and Europe has sent home heating oil prices to levels not seen in five years.

There are many valid reasons behind these high prices,'' said Peter Zipf of Platts Oilgram News in New York. But it's a nervous time, and that's also a reason.''

The national auto club raised a stir two weeks ago when an official said oil companies were fleecing the nation's motorists, saying ``nothing fully justifies'' the jump in prices.

And refinery profit margins are on the rise in California, said Borenstein, noting that gas is about 30 cents higher in the Golden State than nationally.

They should be sitting around 10 to 12 cents higher,'' he said. But the service stations are getting squeezed, which is what always happens when prices go up.''

Jerry Cummings of Robinson Oil, which owns Rotten Robbie stores, fumed at the gouging comments: ``We never get any headlines when we're losing our fannies when the price is down. The retailers aren't gouging anyone; that's for sure.''

Contact Gary Richards at mrroadshow@sjmercury.com or (408) 920-5335.