Gas Prices Are Finally Starting to Fall
It's not too often that the sun comes out and gas prices fall. Fair-weather driving often boosts demand for fuel, thus boosting prices. Also, at this time of year California stations are switching over to more expensive summer blend gas.
But after a nearly $1 rise in gas prices attributed to last month's ExxonMobile refinery explosion in Torrance, prices at the pump have peaked and actually are starting to fall just as spring approaches, experts say.
Patrick DeHaan, senior petroleum analyst at fuel-consumer site GasBuddy.com, says prices peaked last Tuesday, Wednesday and Thursday and then began a slow slide that should continue in the days to come.
"It's looking like, for the next week, gas prices should be falling," he told us.
Wholesale gas prices remain low in most of the Unites States, but California is a special case. We rely on 14 refineries to make special, smog-reducing blends of fuel that are hard to find elsewhere.
So when a refinery goes offline, prices surge.
An explosion at the ExxonMobile refinery sent prices upward even though the oil giant never said whether or not the facility stopped producing gas.
However, Bob van der Valk, senior editor of the Bakken Oil Business Journal, says that he believes "they are out of the gasoline refining business for four to six months while they repair the unit."
Yesterday Liza Tucker of the Santa Monica-based nonprofit Consumer Watchdog accused ExxonMobile of "misrepresentation and omission of information about safety, infrastructure and the ability to supply gasoline" in connection with the blast.
A federal investigation into the explosion was launched Monday.
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Another refinery in Martinez, California, was taken out of the game last month as a result of a labor dispute. The possible loss of two refineries would be likely to keep California gas prices far above the national norm despite this week's cool-off.
DeHaan of GasBuddy says the recent West Coast spike boosted the national average for the price of gas by 8 cents a gallon.
The Auto Club of Southern California said recently that the explosion-related pump hikes in the L.A. area amounted to a whopping increase of 97 cents a gallon from Feb. 18 to the peak in prices last week.
Auto Club spokesman Jeffrey Spring, however, noted that national wholesale prices continued to drop:
The good news is that based on a 45-cent drop in wholesale prices since last week, we may see pump prices reverse course in the coming days ... However, California’s average gas price is now more than a dollar per gallon higher than the national average and Southern California drivers are paying $1.10 more per gallon, or about $16 more per tankful, than they were at the start of February.
Life in paradise has its costs. DeHaan says L.A. drivers "are finally getting a break from the big rise in gasoline prices."
"Gas prices have finally starting to cool off after coming into March like a lion," he said. "We can only hope they go out like a lamb."
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