NEWS
Bay Area gas prices jump -- highest in 15 months
Verne Kopytoff
Chronicle Staff Writer
985 words
15 January 2003
The San Francisco Chronicle
FINAL
A.1
English
(Copyright 2003)
Pushed by tensions in Venezuela and Iraq, Bay Area gasoline
prices have surged 5 cents a gallon since December to their highest
level in 15 months, a new survey shows.
The high gas prices are expected to linger at least through
winter, analysts said, and may surpass the psychologically important
barrier of $2 a gallon this summer in some local cities.
"Drivers are going to complain," said Robert Michaels, an
economics professor at California State University at Fullerton who
specializes in energy. "But there's a lot of factors going on around
the world that California has virtually no influence over."
The average price at the pump in the Bay Area is $1.72, exceeding
by one penny what drivers paid in October 2001, the previous high,
the American Automobile Association of Northern California said
Tuesday.
Troubles in Venezuela are playing a big part in the latest jump.
Oil workers there have been on strike since December, cutting
production in that petroleum-rich nation to a relative trickle.
Iraq is also factor, as it has been for nearly a year. Worries
about a possible war in the Middle East have added about $5 to each
barrel of crude on the world market, according to analysts.
At a local level, the higher oil prices -- to around $32 a barrel
versus $15 a year ago -- have translated into drivers paying more to
fill their cars in all but a handful of Northern California cities.
In San Francisco, a gallon of regular unleaded costs an average
of $1.83, up 6 cents from December, according to the AAA survey. The
price in Oakland is $1.77, up 4 cents. Gas in San Mateo is $1.80, up
8 cents.
CHEAPEST IN CHICO
As usual, prices are cheaper outside the metropolitan Bay Area,
the survey showed. Gas in Tracy averages $1.54, up 6 cents. The
least expensive city is Chico, near the Sierra foothills, at $1.47,
up 3 cents.
Allison Che, who was gasing up her Nissan minivan in the South of
Market neighborhood in San Francisco on Tuesday, said she was
resigned to paying high prices. She said she usually shops around
for the cheapest fuel possible but was in a bind this time and paid
nearly $1.90 a gallon.
Che said she fills her car three times a week, an expensive
routine but necessary to shuttle her children to hockey practice and
elsewhere. Each tank costs around $23.
"I don't think it's going to get better," said Che, who lives in
Walnut Creek.
Arwinder Singh, a taxi driver from Oakland, was concerned about
his meager earnings. He said passengers are scarce because of the
bad economy, and he spends a lot of time circling the streets.
"I don't make much money, maybe $40 or $50 a day," Singh said
after filling his cab in San Francisco. "It's very hard to pay the
rent."
California's gas prices are historically higher than in most
parts of the nation, where the average stands at a relatively
inexpensive $1.47 per gallon, up 9 cents, according to AAA. One
reason is that California requires a special blend of fuel to reduce
smog.
Refineries here make just enough to feed demand, which makes
prices volatile. If one refinery goes down, prices usually soar.
But even by California standards, Bay Area prices are high
because of the relative affluence of people in the area and the cost
of operating a service station. In addition, San Francisco itself
has fewer gas stations than do the suburbs, relative to population.
'BUSINESS AS USUAL'
The Organization of Petroleum Exporting Countries agreed this
weekend to help reduce oil prices -- and therefore gas prices -- by
increasing worldwide production. The ministers hope to offset the
loss of Venezuela's crude. But the effect on the oil futures market,
which can affect gasoline prices, has so far been minimal.
Michaels, the professor from Fullerton, said he expects no big
jump in gas prices this summer. But he added that even the normal
increase in prices during the summer could push a gallon of gas near
$2.
"Business as usual," Michaels said.
Severin Borenstein, director of the Energy Institute at UC
Berkeley, predicted that gas prices will remain about the same for
the next few months. He expects an increase of only a few cents this
summer as long as there are no big changes to the oil market.
Borenstein said the big summer price spikes of 2000 and 2001 --
when gas last surged above $2 a gallon -- were an aberration due to
local refinery issues. This year is different, he said, because the
bad economy has reduced demand for gas.
"If the price of oil stays where it is, and there's a stalemate
in Iraq in the summer, I think we'll be looking at the prices we're
seeing now," Borenstein said.
Analysts said all bets are off if the United States attacks Iraq.
They said prices will spike temporarily but then probably drop
quickly after victory seems assured, as in the Gulf War.
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CHART (1):
GASOLINE PRICES
Bar charts show the average prices for a gallon of regular
unleaded gas for
the past 13 months.
Jan. 14 2003
Bay Area $1.72
San Francisco $1.83
North/ Central California $1.66
California average $1.64
National average $1.47
Source: AAA
Chronicle Graphic
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CHART (2):
GASOLINE PRICES
Bar charts show the average prices for a gallon of regular
unleaded gas for
the past 12 months.
Concord $1.68
Fremont $1.68
Oakland $1.77
Pleasanton $1.70
San Jose $1.68
San Mateo $1.80
San Rafael $1.74
Santa Rosa $1.62
Vallejo $1.64
Source: AAA
Chronicle Graphic
E-mail Verne Kopytoff at vkopytoff@sfchronicle.com.
CHART: SEE END OF TEXT
Document sfc0000020030115dz1f0000s
