The average cost for regular gasoline in California has climbed past $4 a gallon, with prospects for even higher prices ahead. The recent dramatic increases nationally and statewide could hurt consumers and, in turn, the broader economy.
Reporting from Washington and Los Angeles— Just as the recovery is finally looking real, surging fuel prices are once again looming as a major threat to the financial health of U.S. consumers and the broader economy.
The price surge has been particularly steep in California, in part because of maintenance at some refineries that make the state's cleaner-burning gasoline.
Statewide, average pump prices for regular gasoline crossed the $4 mark over the weekend and reached an average of $4.031 a gallon Monday, up 5% in just the last week and nearly 9% higher than a month ago.
"It doesn't bode well for the consumer," said Jeff Spring of the Automobile Club of Southern California. "By April or May you might see some isolated instances where you're seeing $5" gas per gallon.
That could potentially sting President Obama's reelection efforts as well — with Republican primary hopefuls already blaming the Democratic incumbent for higher prices at the pump.
Oil prices have crept higher in recent weeks amid a brighter outlook for the U.S. economy and heightened tensions over Iran's nuclear program. And Monday, crude futures jumped to a nine-month high after Iran said it had halted some oil shipments, raising the specter of even higher prices and tighter supplies ahead, especially for Europe.
Because petroleum makes up about 80% of the retail price of gasoline, increasing crude costs quickly find their way to the pump.
Nationally, drivers started this week paying on average $3.565 for a gallon of regular gas, up more than 5% in the last month. The price surge and wide variance by geography have triggered consumer anger and cries of gouging and speculation.
Newport Beach resident Daniel Heaton said he "did a double take" over the price at a Shell station in downtown Los Angeles: $4.599 a gallon for self-serve regular.
"I thought, 'Is this the lowest one?' It's ridiculous," Heaton said. Still, the 30-year-old attorney went ahead and put $64.42 worth of fuel in his tank; his employer, it turned out, was paying for it.
Down the road at a 76 station, Marisol Lopez, 31, said that the higher gas prices will force her to change how she lives.
"Life is so expensive right now," said Lopez, who works downtown as a medical assistant.
"I'm not eating out anymore," she said. "I'm not going out on the weekend if it's not necessary. With gas being this expensive, I have no choice."
But for all the complaints, CJ Kim, a sales manager for Metro PCS, said there is nothing he can do to avoid driving — and paying for it. He said he shuttles among three stores spread around town and doesn't get reimbursed for his mileage.
"I can't afford not to drive," Kim said. "What can I do? I have to live with it."
Politicians have been picking up on drivers' sentiments.
Republican presidential primary hopeful Rick Santorum on Monday blamed President Obama's "radical environmentalist policies" for the increasing gasoline prices.
Campaigning in Georgia over the weekend, Newt Gingrich reiterated his pledge to lower gasoline prices by accelerating domestic oil exploration and production.
Charles Langley of the Utility Consumers' Action Network in San Diego said consumers have a right to be angry, especially considering that oil consumption is at a multiyear low while fuel exports are near record high levels.
"Consumers have done what we're supposed to do, and the way the refineries in California responded is by producing less gasoline," Langley said. "And at the same time they began exporting their surplus to South America because this industry thrives on tight supply.
latimes.com
Reporting from Washington and Los Angeles— Just as the recovery is finally looking real, surging fuel prices are once again looming as a major threat to the financial health of U.S. consumers and the broader economy.
The price surge has been particularly steep in California, in part because of maintenance at some refineries that make the state's cleaner-burning gasoline.
Statewide, average pump prices for regular gasoline crossed the $4 mark over the weekend and reached an average of $4.031 a gallon Monday, up 5% in just the last week and nearly 9% higher than a month ago.
"It doesn't bode well for the consumer," said Jeff Spring of the Automobile Club of Southern California. "By April or May you might see some isolated instances where you're seeing $5" gas per gallon.
That could potentially sting President Obama's reelection efforts as well — with Republican primary hopefuls already blaming the Democratic incumbent for higher prices at the pump.
Oil prices have crept higher in recent weeks amid a brighter outlook for the U.S. economy and heightened tensions over Iran's nuclear program. And Monday, crude futures jumped to a nine-month high after Iran said it had halted some oil shipments, raising the specter of even higher prices and tighter supplies ahead, especially for Europe.
Because petroleum makes up about 80% of the retail price of gasoline, increasing crude costs quickly find their way to the pump.
Nationally, drivers started this week paying on average $3.565 for a gallon of regular gas, up more than 5% in the last month. The price surge and wide variance by geography have triggered consumer anger and cries of gouging and speculation.
Newport Beach resident Daniel Heaton said he "did a double take" over the price at a Shell station in downtown Los Angeles: $4.599 a gallon for self-serve regular.
"I thought, 'Is this the lowest one?' It's ridiculous," Heaton said. Still, the 30-year-old attorney went ahead and put $64.42 worth of fuel in his tank; his employer, it turned out, was paying for it.
Down the road at a 76 station, Marisol Lopez, 31, said that the higher gas prices will force her to change how she lives.
"Life is so expensive right now," said Lopez, who works downtown as a medical assistant.
"I'm not eating out anymore," she said. "I'm not going out on the weekend if it's not necessary. With gas being this expensive, I have no choice."
But for all the complaints, CJ Kim, a sales manager for Metro PCS, said there is nothing he can do to avoid driving — and paying for it. He said he shuttles among three stores spread around town and doesn't get reimbursed for his mileage.
"I can't afford not to drive," Kim said. "What can I do? I have to live with it."
Politicians have been picking up on drivers' sentiments.
Republican presidential primary hopeful Rick Santorum on Monday blamed President Obama's "radical environmentalist policies" for the increasing gasoline prices.
Campaigning in Georgia over the weekend, Newt Gingrich reiterated his pledge to lower gasoline prices by accelerating domestic oil exploration and production.
Charles Langley of the Utility Consumers' Action Network in San Diego said consumers have a right to be angry, especially considering that oil consumption is at a multiyear low while fuel exports are near record high levels.
"Consumers have done what we're supposed to do, and the way the refineries in California responded is by producing less gasoline," Langley said. "And at the same time they began exporting their surplus to South America because this industry thrives on tight supply.
latimes.com
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