In a two page letter sent to all gasoline dealers in California it would seem that we a headed for gas rationing. Two of the refineries which supply gasoline to California are down, {can't seem to find the reason-don't know if it is y2k or not, maybe we'll never know} and a fire in one of the refineries in S.F. have cause the powers to be to restrict the amount of gasoline each station is to receive to the amount of gas they purchased in Febuary. The letter goes on to say that dealers may have to go to an odd-even rationing or just close down for parts of the month. Gas prices in Northern California have jumped from under a dollar to $1.65 for regular. Got a bike? Got a horse?

-- thinkIcan (, March 27, 1999


Guess I should have added -- Got a few 55 gallon drums?

-- thinkIcan (, March 27, 1999.

Letter, please, scan or type it in, or provide a URL. Thanx

-- Ashton & Leska in Cascadia (, March 27, 1999.

The letter was shown to a close Y2k family member in a service station in a town in Northern california. The person showing the letter is also a Y2K GI. This is factual people, a little bit like Y2K, in a short time span people in California will be aware of this gas problem. April is just around the corner.

-- thinkIcan (, March 27, 1999.

Got a letter?

Far as I know, watching the TV news, it's rising prices, due to two local oil refineries being out of commission, that will effectively decrease demand. The media is estimating we might hit $2.00 a gallon soon.

Other problems though ...


Bay Area Gas Prices Will Rise Even More
Drivers could soon pay up to $2 per gallon

Kenneth Howe, Rebecca Smith, Chronicle Staff Writers
Friday, March 26, 1999 article.cgi?file=/chronicle/archive/1999/03/26/MN44509.DTL

Bay Area drivers can expect to pay steep prices for gasoline -- as much as $2 per gallon for some grades -- as the region reels from two refinery disasters within a month.


While Chevron shut down the unit where the fire occurred, other parts of the plant were operating yesterday.

``We have no estimate of the effect on our gasoline production capacity,'' Boortz said.

If Chevron's Richmond refinery were forced to shut down completely, it would put more than 30 percent of the state's refining capacity out of commission.

The Bay Area already has seen soaring prices at the pump since last month's deadly accident shut down the Tosco refinery in Avon, near Martinez. The Tosco refinery remains closed indefinitely, while nearby, Exxon's Benicia facility is down for maintenance.

``It's terrible timing for a market that's already tight on supplies and drawing down reserves,'' said Severin Borenstein, director of the Energy Institute at the University of California at Berkeley.


The recent surge in gasoline prices also has been driven by higher oil prices worldwide. Crude oil has climbed to $15 a barrel this month due to an OPEC agreement to limit production.

Within an hour of yesterday's explosion, wholesale gasoline prices rose a nickel a gallon -- and they are sure to go higher in days to come.

``We're in uncharted territory now,'' said Paul Hughes, a buyer for Olympian Oil Co., a major independent supplier of gasoline.

Hughes said he thinks gasoline at $2 a gallon for regular grade ``is not inconceivable.``

Even before the Chevron fire, gas prices on the spot market were rising rapidly.

Earlier this week, one gasoline broker said he was paying a wholesale price of $1.30 for unleaded regular gasoline. That price was 40.2 cents higher than before the Tosco accident. Diesel prices were up 28.5 cents a gallon to $1.15.

And those were wholesale prices. By the time that gasoline reaches the pump, another 10 to 15 cents gets added to the price to cover sales tax and dealer profit.

One reason why prices jump so severely is that California can't readily import gasoline from neighboring states because it has its own formulation for gasoline designed to lower emissions and air pollution.

Only a few refineries outside the state make California-approved gasoline. Some of those refineries are in the Gulf Coast, and it takes two weeks for tankers to bring that gasoline through the Panama Canal and up the West Coast.

But that isn't likely to relieve price pressures anytime soon.

``I've been in the industry 20 years, and this is the worst I've ever seen it,'' said Hughes.


Wow. Weve got potential problems brewing. Either that, or for Y2K, some special CA gas standards will have to be relaxed!


-- Diane J. Squire (, March 27, 1999.

-- thinkIcan (

It is usually good to verify the source of this type in "information", such as the Cadillac Y2K problem that appeared on a Cadillac letterhead.

Turns out that the Cadillac letter was a fabrication.

Go to the "source" of where this letter came from and VERIFY it before posting this type of information on such a public forum as this.

It is odd that some people do this type of thing just for fun or to make GI's look like total idiots (for not verifying sources or information).

Find out who issued this letter and of what authority they are within any such government or corporate sector that would have the authority or capability to issue such statements

Mr. K
***certification prevents nullification***

-- Mr. Kennedy (look@it.closely), March 27, 1999.

Well, something definitely seems a bit out of the norm.

I thought all these explosions and mishaps were par for the course. If they were then why should they causing such an adverse reaction now?

-- Wondering (, March 27, 1999.

Mr. Kennedy---I did not do this just for the fun of it. I understand that every gas service dealer in California got this letter. All I'm trying to do is keep some of us ahead of the curve. The dealers are going to be restricted to the amount of gas they purchased in Febuary. In NORTHERN California many service stations were down for the month of Febuary with the instillations of new gosoline tanks. These dealers have no gas purchases for the month of Febuary. This would mean they get no gas in April. This letter was not issued by individual oil company but by some regulating body of the gasoline industry.

-- thinkIcan (, March 27, 1999.

Trying to figure out "who" that regulating body is.


Meanwhile ...

Chevron web-site News


RICHMOND, Calif.,  March 26, 1999  Chevron Refinery General Manager Bill Steelman said yesterdays incident is regrettable and apologized to the surrounding community for any inconvenience and problems associated with the explosion and fire. ...


... At this point, Chevron does not expect this incident to have a significant effect on its ability to supply petroleum products to its customers. ...


Chevron Site Index

-- Diane J. Squire (, March 27, 1999.

IthinkIcan, we are all looking for usable information.

I did not think that you were posting this in fun

Others who sometimes concoct "letters" do these things out of fun or spite, or whatever drives their psych at the time (just look at graffiti on city walls).

What I am saying is that this source or "regulatory" group needs to be identified. If it turns out to be hearsay with no foundation, this type of information can fuel an unnecessary reaction in the very area you are trying to help.

It is best not to go on what someone says has been said. It is best to hear it from people who put these "regulations" into actual effect. If that is the real case, you will have done the service you intend to do. If the letter and "regulations are not verified by actual people in the position of putting out or enforcing such "regulations", then you have some other type of disinformation effort going on.

Mr. K

-- Mr. Kennedy (, March 27, 1999.

gasoline prices in my area in Virginia have risen 10 cents in the past three weeks. Mostly in the past week. Not that big a deal right now but I have started storing extra gasoline. Just a feeling. The one thing I don't want is to get caught by surprise without enough gas to put my emergency plans into effect. I need to be able to drive for 750 miles without worrying about gas. I am still assuming that we have between three and five months left before it becomes obvious to the general population that something is definitely going wrong. Still hoping my preparations are not needed but I don't see how with all the indicators that you can see if you only look. yes I feel like traveling on

-- traveling stranger (, March 27, 1999.

Ouch!!! Dont quite KNOW what this means yet.


The Energy Commission has activated the
of its Energy Emergency Contingency Plan.

California's Energy Emergency Contingency Plan
California Energy Commission

One of the California Energy Commission's legislative mandates is preparing for and dealing with energy emergencies. The Commission, under the Chairman and at the direction of the Governor, is the primary state agency to direct the state's response to natural and man-made energy emergencies. In the past two decades, the Commission has responded to energy shortages as the result of fire, earthquake, civil unrest and supply disturbances. The Commission also prepares an emergency plan every five years and tests that plan using simulations and models. Additionally, the Commission assists local government in developing local energy emergency plans.

From this page, you will be able to access the latest situation reports if the state experiences an energy emergency. For information about electric utility power outages, contact the local electricity service provider.


Current State-Wide Energy Emergencies

The Energy Commission is in its Verification Phase
Of its Energy Shortage Contingency Plan.

Chairman William J. Keese informed Governor Gray Davis on March 22, 1999, that he had "...activated the Verification Phase of the California Energy Shortage Contingency Plan. This action was based on a combination of events at California refineries that may potentially impact gasoline and diesel prices and supplies."


Current State-Wide Energy Emergency Situation Reports
March 26, 1999


Friday, MARCH 26, 1999

This Situation Report comprises the Energy Commission's assessment of the gasoline and diesel situation in California. 1999_situation/1999-03-26_sit_report.html

(Note: Its just about prices going up).

Contingency Plan ...


-- Diane J. Squire (, March 27, 1999.

Another source to watch ... nothing yet, though that letter could be hidden in the members only area.


California Service Station & Automotive Repair Association

Links to Other Automotive and Service Station Related Sites


Current Newsletter (Feb. 17, 1999)


-- Diane J. Squire (, March 27, 1999.

Mr. Kennedy,

Chill out. Something's going on.

Thanks for the alert thinkIcan.


-- Diane J. Squire (, March 27, 1999.

California Energy Shortage
Contingency Plan
California Energy Commission

Publication Number: P300-96-006
December 1996

Section I: Plan Description

EMERGENCY RESPONSE PHASES section1.html#emergency

Consistent with the philosophy of "free market approach" and minimum government intervention, the Contingency Plan is structured in four levels, or phases, of increasing activity. The four phases are:


Verification Phase marks the activation of a more formal communication network with the Office of Emergency Services, the U.S. Department of Energy, other states, other California state agencies, local government agencies, and private industry, as appropriate. Staff will rapidly determine the nature, extent and duration of a potential or impending energy shortage.

The staff will assess the potential impacts of an anticipated petroleum, natural gas or electricity shortage on energy prices and supplies, and recommend further action to the Chairman. This assessment serves as the basis of a formal Verification Report for submission to the Governor by the Chairman.

If the Chairman determines the existence of a protracted energy problem, he may recommend transition to the Pre-Emergency or Emergency phase of the Contingency Plan.

Note ...

If this is an emergency, turn directly to: Section II: Plan Operation, and follow the instructions located in your appropriate Operating Guidelines.

Section II : Plan Operation


Partially down the page ...


Directs the public, as well as all state government agencies, in voluntary energy conservation measures. When appropriate, proclaims a State of Emergency and sign Executive Orders necessary to implement mandatory conservation programs deemed necessary upon recommendation by the Energy Commission.


___Receive periodic reports from the Energy Commission on the status of California's energy price, supply and distribution systems.

___Obtain briefings from the Energy Commission Chairman.

___Alert Press Secretary for news releases and response to media inquiries.


___Issue public appeal for voluntary energy demand reduction.

___Meet and confer with the Emergency Operations Executive Council.

___Direct all state government agencies to reduce energy consumption.

___IF the energy shortage level increases, prepare to proclaim a state of emergency.


___Review emergency response recommendations submitted by the Energy Commission.

___Issue public appeals for increased energy conservation efforts.

___Sign Executive Orders as necessary to implement mandatory energy conservation programs.

___Direct all state government agencies to increase energy demand reduction efforts.

___IF energy shortage level increase and becomes widespread, request a presidential declaration of emergency.

___Request federal assistance and aid, where needed, to ensure order and protect the health, safety and essential services of the citizens of California.


Directs staff to proceed with specific elements of the plan. Using the data and analysis provided by staff, presents recommendations to the Governor on how best to respond to the impacts of the energy problem.


___After notification of potential shortage, designate a Contingency Planning Manager and instruct staff to confirm reports and monitor situation.

___Establish briefing schedule with Executive Director and Contingency Planning Manager to evaluate situation.

___Meet with Committee Member, Contingency Planning Manager and Public Information Officer (PIO) to review news releases.

___Direct preparation of a Verification Report and Situation Reports for submittal to the Governor's Office.

___IF the probability of energy shortage is likely or the situation worsens, go to Pre-Emergency phase.

___IF the situation is resolved, direct staff to prepare After- Action Memo and return to Readiness phase.


Oversees the activities of the Contingency Planning staff, and assists the Chairman in briefing the Governor on the status of an energy shortage.


___After notification of a potential energy shortage, meet with Chairman to evaluate situation and give direction to Contingency Planning Manager.

___Attend staff briefings.

___As needed, assist Chairman and Public Information Officer with press releases.

___Review Verification Report prepared by staff for Governor's Office.

___IF the probability of an energy shortage is likely, in conjunction with the Chairman direct transition to the Pre-Emergency phase.

___IF the situation is resolved, review After-Action Memo prepared by staff.

Etc. ... And on down the emergency response food chain.

*Big Sigh*

-- Diane J. Squire (, March 27, 1999.

My Northern California family member is trying to get a copy of this letter {at my request} from her GI friend {who has worked at this service station for several years.} If she can't get the letter I,ve asked her to find out the source of the letter. She said the letter looked like it had been faxed. Will keep you informed. She is going over there this afternoon.

-- thinkIcan (, March 27, 1999.

Thanks again, thinkIcan.

Look forward to "seeing" that info!

Just other useful links.

Time for a latte.


Could be worse. Could be Kosovo.

Diane, keeping it all in perspective

Chevrons recommendation ... Longer-Term Storage of Gasoline index.html

California Energy Commission


News Releases


Site Index -- Directory / Index of Energy Commission's Web Site






Gasoline and Diesel Prices -- Latest Information


California Retail Gasoline Price Report (Fuels Watch -- weekly gas pricing info)


-- Diane J. Squire (, March 27, 1999.

accident my foot profits hsave been down recently also they have to pay for those cruise missles dont you know!!!!! who can trust anything anymore. may the bird of paradise poop in their hats

-- hayhay (, March 27, 1999.

Diane, you're right it could be worse and it might get that way. Have you heard the one about the "Road Closed" signs? I heard it tonight, it goes like this.

An aquaintince's son is a California Highway Patrolman. He pulls over a semi because the truck appears overloaded. The cargo is on a flatbed trailer covered by tarps. During the course of the traffic stop the patrolman looks underneath the tarps. What he sees are large traffic signs reading: ROAD CLOSED BY MILITARY ORDER.

Urban legend, "Rumors and Propaganda" or flat-out lies? Time may tell. Don't think I'll be caught without my map of all the back roads between home and where ever I'm at.


-- Wildweasel (, March 27, 1999.

Wise of you Wildweasel, perhaps you should get a scanner and CB and listen to the truckers talk amongst themselves, you find out more than what you bargained for.

-- ~~ (, March 27, 1999.

Just a few days ago there was a story on my local N. California news about a controversial commercial that was going to be aired. This commercial is saying that the gasoline additive California uses to help keep the air clean is actually causing added water pollution problems. It sounded like Gov. Davis is thinking about having this additive removed, but the makers of the commercial think it should stay in the gas. (I saw the commercial later that evening) Would this be Gov. Davis trying to enable California to buy "non-California gas"?

-- Suzie-Q (, March 28, 1999.

Traveling mentioned above I need to be able to drive for 750 miles without worrying about gas. I always wonder about this kind of scenario: driving 750 miles, dead of winter, triggered by social/economic unrest, all it would take are two or three trees downed anywhere along this route and the whole plan is toast. Ne c'est pas ?

-- Blue Himalayan (bh@k2.y), March 28, 1999.

Or a couple spin and 30 minute dig outs. Cuts your range down to OH SHUCKS we missed it by 30 miles.........


-- Chuck, a night driver (, March 28, 1999.

The two page letter I referred to came out of the controllers office of Chevron. Today an article from a northern California newspaper talks about a forth refinery being down. Got a few 55 gallon oil drums. Doesn't sound very good to me.

-- thinkIcan (, March 29, 1999.

Can you give a link to this article???

-- Moore Dinty moore (, March 30, 1999.

Last night on the 11:00 news KRON TV Channel 4 (S.F.) and other news stations discussed the shortages in addition to skyrocketing prices as a way of rationing. (Around $1.60 to $1.99 in various locations).

News this a.m. -- apparently Exxon IS rationing their dealers by 50% of their normal supplies. (I looked at their web-site yesterday and couldn't find any public notices). Some Exxon stations have run out and have signs on the pumps "Out of Gas." TV crews showed it.

A Shell station in Sacramento was offering gas this a.m. for $1.05 for a few hours -- a promo deal. The skycam helicopter counted 53 cars lined up and waiting for the deal. Shades of the 70s again.

Will try to find some articles now.


-- Diane J. Squire (, March 30, 1999.

For Immediate Release: March 29, 1999
Media Contact: Claudia Chandler -- 916 654-4989

California Energy Commission
Provides Assessment of the
Most Recent Gasoline and Refinery Situation 1999_releases/1999-03-29_gasoline_prices.html

Statement of Energy Commission Chairman William J. Keese:

"Current gasoline production levels will not continue to support the high prices consumers have been paying at the pump. This market has been fuled by speculation during tight supplies over the past two weeks, and the consumer has felt the pinch.

"Today's production is 880,000 barrles of reformulated gasoline per day compared to 921,000 barrels this time last year. This is 96 percent of normal production for the month. At this time, 12 of the state's 13 refineries are up and producing California reformulated gasoline. Tosco's Avon is the only refinery that is down. Two of the 12 refineries, Chevron and Exxon, are not operating at full production. However, Exxon has indicated publicly that it expects to be back at normal production levels either by the end of the week or early next week.

"Chevron's most recent public statement indicates that the fire (at their refinery) only caused a modest shortfall in California reformulated gasoline production. Their statement indicates that they will meet all of their contractual obligations until they return to normal operation.

"The 880,000 barrels per day production does not include imports of gasoline and blend stocks used to make California reformulated gasoline. These shipments began arriving over the weekend from the handful of out-of-state refineries that can produce California reformulated gasoline and are expected to continue through mid-April.

"While some marketers are experiencing difficulties in obtaining gasoline, as the refineries come back to full production levels, we should see prices level off and decline.

"There are adequate supplies of gasoline to meet consumer demand under current market conditions."

-- Diane J. Squire (, March 30, 1999.

Ya know, the lesson from this whole oil refinery experience is that it doesnt take much alteration in the oil supply to trigger higher prices and dealer-based gas rationing.

Expect it for Y2K. Think foreign shipping and supply problems.


Got your back-up bicycle?


Soaring Gas Prices Infuriate Motorists
Air board urged to ease standards, allow sale of out-of-state fuel < br> Rebecca Smith, Chronicle Staff Writer
Tuesday, March 30, 1999
)1999 San Francisco Chronicle article.cgi?file=/chronicle/archive/1999/03/30/MN10590.DTL

Northern California gasoline prices have surged more in the past five weeks than at any time since the OPEC oil embargo 25 years ago, experts said yesterday.

After another jump of as much as 10 to 15 cents a gallon the past few days, motorists are paying 30 to 50 cents more a gallon for gasoline than before a series of refinery mishaps began crimping supplies last month.

Frustrated retailers are begging state regulators to open up the supply line from other states. But regulators do not agree that there is a problem that needs fixing.

They are blaming price speculation, not actual shortages, for the almost-daily price increases, and they said yesterday that they hope most of the refineries that have had production problems will be back operating next week.

Bill Keese, chairman of the California Energy Commission, said state supplies are down only 4 percent from a year ago, when 921,000 barrels were refined each day. ``The problem is speculation, not supply,'' he said. ``The market will not support the high prices at the pump consumers have been seeing.''

Keese said he has received assurances that refineries will approach normal output by the end of the week. Furthermore, he said, ocean tankers full of California- formulated gasoline are chugging toward the state from the Gulf States and should help ease supply problems.

None of that placates skeptical dealers and marketers, who are urging the state Air Resources Board to ease standards that limit the sale of gasoline from other states with less- stringent pollution standards.

Specifically, they want the board to let service stations sell gasoline that meets federal emissions standards but is 7 to 8 percent more polluting than California reformulated gasoline that was blessed by the state in 1996.

``If we don't see an increase in supply, prices could go up another 20 to 30 cents a gallon the next few weeks,'' said Will Woods, head of the Automotive Trade Organizations of California, a trade group representing 900 independent service station owners who have experienced the worst of the price spikes in recent weeks.

Consumers express continued shock at what has become the biggest run- up in prices since the 1991 Gulf War increased retail costs by about 35 cents a gallon. That increase, although comparable to what the state has seen so far this year, happened over a three-month period. Most experts say you would have to go back to 1973, when OPEC nations cut off shipments to the United States in retaliation for U.S. support of Israel, to find anything close to what is happening now.

The latest price spike began February 23 with a fatal fire that shut down the Tosco refinery in Avon. That happened when Exxon's Benicia refinery was closed for scheduled maintenance.

Thursday's explosion at Chevron's Richmond refinery compounded the problem. As energy officials scrambled to assess the effect of Chevron's fire, Arco acknowledged that its Carson refinery also was operating at less than peak capacity because of maintenance work. That meant four of the state's dozen major refineries were affected.

Still, the air resources board is opposed to any tinkering with California's gasoline standard because the problem now looks temporary.

``We'd be concerned about the precedent,'' said Allan Hirsch, spokesman for the board. ``Besides, if we suspend the rule and allow gas in from neighboring states, it might produce shortages in those states.''

The real question, some economists are asking, is whether the state has boxed itself in by adopting its own separate standard that ``islands'' the state gasoline market.

They and others point out that some California refineries are exporting gasoline, right now, to neighboring states -- gasoline that meets the federal standard, not the state standard. Nevertheless it is seen as analogous to Ireland exporting potatoes during the 1845 famine.

None of the market analysis means much to angry motorists who find they need more than a $20 bill to get a fill-up.

``I think they're totally ripping us off,'' said Kenan Sater, a carpenter who paid $1.69 a gallon for regular unleaded at a Texaco station in San Francisco. ``Three days ago, it was $1.45. Three weeks ago, it was $1.25. . . . I don't think it's right.''

Many consumers noted a topsy- turvy situation in which no-name gasoline now costs more than name-brand gasoline.

That is because independents -- that is service stations not allied with big oil companies like Chevron or Texaco -- buy most of their gasoline out of the spot or short-term market where refineries sell their excess inventory. Price changes show up quickest in the daily market.

At Gateway Gas in San Rafael, unleaded regular that sold for $1.05 was going yesterday for $1.53.

``I paid $1.75 for it, wholesale, today,'' said Gateway Gas owner Shahram Shahnazi. ``I'm losing between $1,000 to $1,200 a day just to keep my prices low.''

Mike Shimak, whose family operates 12 service stations in the Bay Area, said spot prices have gone up 15 to 20 cents a gallon in the past two weeks.

``We usually get price increases of 0.9 cents or 1 cent -- at the most it's 2 cents,'' he said. ``Now we're seeing price increases of 8 cents.''

All the independents are in the same situation, experts said.

``Unbranded gasoline has dried up in this state,'' said Jay McKeeman, executive vice president of Western Independent Oil Marketers in Sacramento. ``Once the branded stations get their supply, there isn't anything left for the independents.''

It hasn't been smooth sailing at all the branded outlets, either. Exxon dealers were notified late last week that they're on ``allotment'' and only will get 60 percent of the gasoline they received a year ago. Even during the Gulf War they still got 80 percent. As a result, some Exxon stations ran out of some grades of gasoline during the weekend.

Consumers are showing little tolerance for explanations. They hear them as excuses.

``I think it's just a scam,'' said Doug Trantow, a record producer from Hollywood who tanked up at a Unocal station in San Rafael. ``Everybody knows there is an oil glut. They're just using the attention from the refinery fires to make people think there's an oil shortage.''

Vicki Cooke, the assistant manager at the Unocal station that Trantow was patronizing, said her wholesale price has gone up 25 cents a gallon forcing her to charge $1.55 for regular unleaded gasoline.

Not everyone is upset about prices. Ken Grant, a San Rafael chef, obliviously filled his Volkswagen Rabbit with $1.75 supreme at an Exxon station.

``I haven't noticed,'' he said. ``I use a credit card.''

Chronicle staff writers Jonathan Curiel, Peter Fimrite, Jason B. Johnson, Henry K. Lee, Julie Lynem also contributed to this report.

-- Diane J. Squire (, March 30, 1999.

State agency says gas is too costly
By Katherine Seligman
Tuesday, March 30, 1999
)1999 San Francisco Examiner

Despite soaring prices at the pump, there is no significant gasoline shortage in California, according to officials at the California Energy Commission, who say the jump may partly be due to human factors - speculation and fear.

"We're in a tight market, but we're not in a shortage," said Claudia Chandler, assistant executive director of the commission, as prices continued to spike upwards. "The production we're seeing does not warrant the prices that are out there."

The prices, said Chandler, are probably fueled partly by speculation in the marketplace by "everyone who's a market player, from refiners to station owners to consumers."

"Why blame the consumers?" she said. "They are the last people I want to blame, but everyone is fearful of the same thing, that they won't be able to get gas tomorrow at the price they paid today."

URL: bin/article.cgi?file=/examiner/hotnews/stories/30/gas.dtl


Chevron's 15% shortfall

Fred Gorell, a spokesman for Chevron, said the company has a 15 percent shortfall in supply due to last week's accident and at the same time an increased demand for gasoline.

Gorell said the price increases are due to a combination of the lower supply and higher demand - 1 to 3 percent higher than last year - and higher crude oil prices that resulted from a cutback in supply from the oil-producing countries.

Supply also is typically down in warmer seasons, he said, due to a change in formulation needed for gasoline used in summer conditions.

"To get there, you have to take other things out of the gas," Gorell said. "When you take them out, you make less gasoline. You have a volume shrinkage that historically pushes prices up."

Despite these overlapping factors, he said, Chevron is meeting the needs of all its suppliers, partly by using products imported from other states and partly by relying on the "spot" or speculative market, which typically is more volatile than the wholesale market.

"What we have is a slice in time," Gorell said. "If prices are high and out of balance, then the marketplace is at work correcting it and people should know that."

Chandler of the energy commission urged consumers to shop around for the best prices. Prices may vary from station to station by as much as 10 cents per gallon, she said. "People should be buying regular unleaded gasoline unless their manuals prohibit it," she said. "And I suggest that they conserve gasoline.

Take the golf clubs out of the trunk, roll up the windows and drive closer to 60 miles per hour."

-- Diane J. Squire (, March 30, 1999.

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