SF Bay area gas prices reach new record

www.napanews.com Thursday, March 6, 2003 From The Associated Press

SAN FRANCISCO -- San Francisco Bay area gas prices are breaking records and irritating motorists, and the price is not much lower in Southern California.

In San Francisco, regular unleaded fuel now costs an average of $2.19 a gallon, according to a survey by AAA of Northern California. In Oakland, gas averages $2.09 a gallon, and in San Jose it has hit $2.08.

Statewide, the average price is $2.04, beating the previous record of $2.03 set in May 2001.

The average price was a bit under $2.01 per gallon in the Los Angeles area and about a penny higher in Orange County. San Diego drivers were paying an average of nearly $2.04 per gallon.

Over the past year, the price for self-serve regular gas has jumped an average of 67.8 cents in California.

"It's ridiculous," said Sandra Cerrigan, who paid $2.23 for gas for her Land Rover at a San Francisco Chevron Station. "We're getting gouged."

Prices could rise even further for the summer driving season, which begins in March, said Sean Comey, AAA spokesman. He said gas prices are typically lower in winter.

California usually has higher gas prices than most other states because the state has higher fuel taxes and requires a special blend of lower-smog fuel. Nationally, gas prices averaged $1.68 Tuesday, according to AAA. The record is $1.72, set on May 15, 2001.

A spokeswoman for the American Petroleum Institute said the higher prices are determined by crude oil prices and other factors.

The price for crude oil almost reached a 12-year high last week at $36.70 a barrel. A potential war in Iraq, cold weather on the East Coast and a strike in Venezuela are blamed for pushing the price of a barrel that high.

"California gasoline prices have been rising steadily for the past nine and a half weeks and increases are likely to continue," Carol Thorp, spokeswoman for the Automobile Club of Southern California, said in a written statement. "The slow march to a possible war with Iraq has been the major factor in pushing up prices. Gas price reductions may be unlikely until the Iraq situation is resolved."

When taking into account inflation, current gas prices still are not as high as they were two decades ago, when they hit a peak after President Reagan deregulated gas prices.

"We have an open investigation, constantly, on gasoline prices and we have no evidence of there being illegal activities," state Attorney General Bill Lockyer said during a news conference Wednesday in Los Angeles.

He said the hikes appeared to be largely due to rising crude oil prices, war anxiety and an ongoing reduction of inventories by oil companies.

"The companies are holding less and less, and so that means they buy more expensive oil when they have to and it's driving up the price," he said.

Lockyer also said the oil market needs more competition.

"We don't see illegal manipulation. We do see the continuation of six companies that control 92 percent of the market," he said.