Gas surges to $3.452 a gallon

By: DAVE DOWNEY - Staff Writer | Wednesday, May 9, 2007 8:27 PM PDT ∞

NORTH COUNTY -- Local gasoline prices jumped 4.1 cents a gallon last week, to an average of $3.452 for a gallon of regular unleaded gas on Wednesday, according to a new survey by the Utility Consumers' Action Network of San Diego.

However, the average price was 0.2 cents off Saturday's all-time high average for regular of $3.454 a gallon in North County, and indications are that consumers are about to get more relief at the pump, said the group, which conducts the survey for the North County Times.

"We have some teeny, tiny signs of peaking here," Marie Montgomery, spokeswoman for the Automobile Club of Southern California in Costa Mesa, said by telephone Wednesday.

Montgomery said the average for the San Diego metropolitan area reached $3.499 on Wednesday, a decline of a half-cent from Tuesday.

Analysts said that prices may be leveling off because Congress has decided to probe the recent string of price spikes and fuel supplies increased last week.

Several refineries around the country have been down for maintenance or repairs, restricting supplies and fueling fears that production won't keep pace with peak summer demand, analysts said. The summer driving season kicks off on Memorial Day weekend.

"This week, for the first time in a number of weeks, production has actually moved upward," said Susanne Garfield-Jones, a spokeswoman for the California Energy Commission in Sacramento. Garfield said California fuel production is up 1 percent from last week.

As a result, Charles Langley, gasoline analyst for UCAN, said that North County motorists can expect a modest downward trend in prices.

"UCAN predicts that prices will continue to drop as long as congressional hearings into collusion, price fixing and market gaming by Big Oil continue," Langley said in an e-mail message. "Consumers can also help spur price cutting by delaying their purchases of fuel until the last minute, and by calling their elected officials."

It's about time, said Ernie Holden, a retired engineer from Oceanside.

"I think it's terrible," Holden said of the record-high prices. "I really feel sorry for people who are working. Here in North County, public transportation isn't that great, so people have to rely on their cars."

As for a price decline, Holden said that he'll believe it when he sees it.

"I kind of doubt it because they sell more gas during the summer vacation season," he said. "Oh maybe it will come down a couple pennies, you know, but no significant amount."

Montgomery said that it is too early to tell, but California and North County prices could be reaching a seasonal peak. While in many years the peak is reached around Memorial Day, in the last four, it has come in the middle of May, she said.

Still, this spring's spike is different than that of recent years; prices rose sharply, stagnated, rose sharply, stagnated and then shot up again, Montgomery said.

"It's not following the usual pattern where it goes up and up and up and up, and then kind of floats down," she said. "We can only hope that this is not another sputter -- that it will be the peak."

In an encouraging sign, the California wholesale price fell to $2.53 a gallon at the end of business Tuesday, said Garfield-Jones of the energy commission.

"The spot price has dropped 30 cents since last Wednesday," Garfield-Jones said. "If the spot price is loosening up, that means more supply is coming on the market, which will dampen rising prices."

Garfield said that California, with its 17 refineries, is vulnerable to production cutbacks because it imports 10 percent of its gas.

"We don't make enough gasoline to supply our own needs during the peak periods," Montgomery said. "And the bottom line is that we've got a bunch of refineries that are really rickety. They're not making new ones, and they're not fixing the ones that they have."

-- Contact staff writer Dave Downey at (760) 740-5442 or ddowney@nctimes.com.

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