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California gas prices may hit $4 by next month | The Fresno Bee

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Clovis News

California gas prices may hit $4 by next month

By Bethany Clough / The Fresno Bee

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February 23, 2011 11:55 PM

Remember when gas cost $4 a gallon? Prices are predicted to hit that mark again in California, perhaps as soon as next month.

Violent protests half a world away combined with a normal springtime rise in California gas prices mean drivers are going to be spending more.

"There's 50 cents of fear built into the market right now, and it's getting worse every day," said Scott Cain, vice president of San Joaquin-based West Hills Fuel Inc.

The first time Fresno gas prices broke the $4 psychological barrier, back in the spring of 2008, drivers were already trading in their gas-guzzling vehicles, canceling vacations and buying fuel-efficient scooters.

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Fresno hasn't seen prices that high since September 2008, according to AAA of Northern California.

But that's about to change, according to Cain, several local gas station owners and Patrick DeHaan, a senior petroleum analyst with Minnesota-based GasBuddy.com, a fuel price information organization.

DeHaan said California gas prices could surpass $4 next month or early in April.

It's not a sure thing, however. AAA spokesman Matt Skryja notes some experts say Saudi Arabia can easily make up for any loss of oil in Libya. And if the Middle East stabilizes, increases will stop, Skryja said.

But DeHaan said the market isn't betting on stability. Prices are built on fears that the unrest could spread to Saudi Arabia, he said.

And prices in California likely will hit $4 even without problems in the Middle East, he said.

The average price of a gallon of gasoline hit $3.58 in Fresno on Wednesday and $3.59 in the Visalia-Tulare-Porterville area, according to AAA.

Nationally, gas averaged $3.19 a gallon Wednesday.

Gas stations haven't yet felt the full force of prices that are skyrocketing further up the supply chain, Cain said.

They will likely climb to at least $3.80 in the Valley within the next couple of weeks, he said.

Crude-oil prices hit $100 a barrel Wednesday for the first time since 2008. And a 25-cent increase in gasoline futures within 72 hours on the New York Mercantile Exchange is still working its way down to the street, DeHaan said.

Meanwhile, California is gearing up for the seasonal switch to a summer blend of gasoline, which is more expensive. The state requires the gas to be sold in summer. Its additives allow the fuel to burn more efficiently in hot weather, reducing air pollution.

And when vacation season hits, prices also typically will rise.

"Now you throw in the Middle East with Libya and you essentially have a double whammy," DeHaan said.

Gas stations have been busy lately changing their prices, said Kelley Maguire, manager of the Chevron station at Ventura and Cedar avenues.

He said prices have been changing two or three times a week recently, compared to once a week or every 10 days when things are calm.

"We set our price based upon what we're paying for it, and right now that's fluctuating a daily basis," he said.

The climbing prices were met with pessimism by drivers in Fresno on Wednesday who said they already had cut back on gas spending.

José Garcia of Clovis said he sold his Ford Expedition when gas hit $4 a gallon last time and replaced it with a more fuel-efficient Toyota Corolla. But he still must commute 20 miles a day to his accounting job on the west side of Fresno, he said.

"There is nothing I can change," he said. "I have no choice."

On Wednesday, he filled up at the Chevron at Shaw and Brawley avenues, which was selling gas for $3.75 a gallon for credit and debit-card customers, and $3.65 for cash.

"It's ridiculous," said Christina Lara, who bought gas at the Arco at Ashlan and Valentine avenues for $3.43 a gallon Wednesday. "Usually I like to fill up, but now I take it $20 at a time."

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