Drivers dig deeper as gas prices rise

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Drivers dig deeper as gas prices rise By Cathleen Ferraro Bee Staff Writer (Published March 1, 2000)

Gasoline prices have jumped to an average $1.58 a gallon in Sacramento, up 17 cents from just two weeks ago, reflecting delays in refinery maintenance and a surge of crude oil prices.

Gasoline industry experts say prices at the pump aren't expected to drop until April, just in time for a surge in demand as the summer driving season gears up.

The refinery problems have hit Northern California particularly hard, though the rest of the nation is paying record prices as well as crude oil prices surpass $30 a barrel.

Some drivers are starting to change their habits in response.

Damian Duran of Elk Grove said he started car pooling two weeks ago with a co-worker because of the gasoline price increases.

"I can't believe it," Duran said as he filled his tank with $1.84 a gallon unleaded plus Tuesday at the Chevron station at Broadway and 19th Street. "One week the prices are OK, . . . next week it jumps 10 cents to 20 cents it seems."

Duran, who works at Designer Tile in Elk Grove, said he's trying to find more ways to avoid using his car.

Winter is normally when oil refineries shut down parts of their operations for maintenance and repairs, so that things are ready for the summer driving season.

The problem this year, experts said, is that fixes and upgrades have stretched beyond the planned two- to three-week shutdowns.

"That affects production just as much as big, dramatic events like (oil refinery) fires, but it's just not as widely known until inventories are down. And that's where we are today," said Paul Moreno, spokesman for the California State Automobile Association.

The group, also known as AAA of Northern California, issued a special report Tuesday showing gas prices jumped 12 cents to 17 cents a gallon in Sacramento and seven other Northern California cities since mid-February.

The survey, completed Monday, tracked prices for self-serve regular unleaded gasoline.

If drivers aren't happy about it, neither are station owners.

"It's like a runaway train," said Cathy Holtsman, owner of the Chevron station at 4800 Freeport Blvd. in Sacramento. "I think it's horrible and I can't do anything about it because I'm caught in the middle. We're just trying to keep up with (our) bills."

In the past two weeks, Chevron Corp. sent several notices of wholesale price increases on the gasoline it sells to Holtsman and other California dealers. The increases have ranged in size from a penny a gallon to almost a nickel.

While fuel prices are higher in Sacramento than they have been in months, they are still below the record $1.67 hit in April, when California refinery explosions cut into gasoline production.

Right now, San Francisco dealers are selling the most expensive gas in the state, according to the AAA report, averaging $1.71 a gallon. At least one Shell station in San Francisco's Sunset district was charging $2.05 a gallon Tuesday for regular unleaded fuel.

"It's bad. We don't know how the high prices are going to affect our business," said Leo, a limousine company manager who declined to give his last name, as he filled up near the financial district.

Gas prices in Southern California also are climbing, though not as sharply, for reasons the auto club and other analysts couldn't explain. Motorists in Los Angeles have seen prices rise to an average of $1.46 in two weeks.

So when does it all stop?

"If everything works right and these refineries come out of their (maintenance) turnarounds . . . then wholesale prices should decline by mid-March," predicted Tom Glaviano, an analyst at the California Energy Commission.

But pump prices won't moderate for another month later, or until mid-April, he warned.

The Oil Price Information Service, an online price and market analysis firm, made similar predictions Tuesday.

"I think it's a short-lived situation," said Scott Berhang, an editor at the Lakewood, N.J.-based pricing service. "Some of these refineries on the West Coast are very, very old and they get in there, start making maintenance changes and things take longer than they thought. But in two weeks this will look a lot different because maintenance should be finished."

Outside California, motorists are coping with high gas prices, too, after the Organization of Oil Producing States scaled back production last year. A gallon of self-serve, regular unleaded fuel now goes for roughly $1.42 nationwide, the U.S. Energy Department said.

OPEC members will meet in Vienna on March 27 and are expected to agree to raise production that should ease oil price pressures.

A year ago, crude oil sold for $12 a barrel, and gas at some Northern California stations was as low as 99 cents a gallon.

http://www.sacbee.com/ib/news/ib_news01_20000301.html



-- Martin Thompson (mthom1927@aol.com), March 01, 2000


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