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California gas prices stall below $4, but for how long?

March 18, 2011 |  8:42 am

In California, the seemingly endless rise of the most expensive gasoline in the U.S. outside of Hawaii finally came to an end overnight. The average price of a gallon of regular gasoline in the state dropped 0.1 cent to $3.96, according to the AAA Fuel Gauge Report. But some Californians may well be wondering this: Where isn't it $4 a gallon?

CA_grph In Santa Barbara, Santa Maria and Lompoc, the state's most expensive gasoline is selling for an average of $4.02 a gallon, up 0.2 cent overnight and 1.9 cent higher than a week ago, said the AAA.

The Fuel Gauge Report uses an analysis of daily credit card receipts from more than 100,000 retail outlets around the U.S., compiled by the Oil Price Information Service and Wright Express.

In San Luis Obispo, Atascadero and Paso Robles, regular gasoline was averaging $4.02 a gallon, up 0.1 cent overnight and up 2.9 cents since last week.

In San Francisco, the average for regular gasoline was $4.01, down 0.5 cent overnight, but nearly 3 cents higher than a week ago.

And while Los Angeles and Long Beach were unchanged overnight at an average of $3.97 a gallon, some stations such as the Mobil on Santa Monica Boulevard near Lincoln Boulevard were selling it for $4.29 a gallon.

"Where are they doing these price surveys? Because everything I'm seeing around here is $4 a gallon and no one can explain why," asked Belinda Scott, a 35-year-old co-owner of a West Los Angeles hair styling salon who considers herself lucky since she can nurse close to 40 miles a gallon out of her late-model Mini Cooper under optimal conditions. But those conditions are rare. "It's just makes me angry."

And if Californians required mid-grade or premium gasoline or diesel, they have already been paying more than $4 a gallon. The mid-grade average for the state was $4.06, the AAA said. Premium gasoline was averaging $4.16 a gallon and diesel was selling for an average of $4.30 a gallon.

Some observers, such as Tom Kloza, chief oil analyst for the Oil Price Information Service, said that California prices were not expected to go much higher and may have reached a peak.

Others were not so sure, primarily because three of Japan's most important refineries are still shut down after the recent earthquake, prompting a scramble in world markets for more refined products to replace the losses in gasoline, diesel and heating oil.

"The Japan earthquake, tsunami and now the nuclear plant meltdown are putting uncertainties into the equation. The wet barrel traders (as opposed to paper traders) are ready to react to the immediate opportunities coming out of the unfortunate natural disaster in Japan," said fuel price specialist Bob van der Valk, who added that the reprieve on prices may be short lived.

Readers can check fuel prices anywhere in the U.S. and in many metropolitan areas here.

-- Ronald D. White

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