California gasoline prices have risen by 32 cents per gallon in the last 14 days and 15.5 cents per gallon in the past week alone, averaging $3.87 per gallon – 82.8 cents higher than a year ago – according to the U.S. Department of Energy.
The recent surge, topping out at 19 cents per gallon in the final week of February, is the second largest weekly increase since the DOE began tracking gasoline prices in 1990. Only when Hurricane Katrina hit the gulf coast in 2005 did prices jump more rapidly.
“It’s the way it is,” said Ray Alexis, of Turlock. “Prices are high. But I’ve still got to drive.”
Alexis was hit by the high prices twice on Tuesday, as he fueled both his and his godbrother Les Cornejo’s Ford Mustangs. Alexis paid $3.93 per gallon of premium unleaded at the ARCO on Golden State Boulevard, spending more than $50 to gas up both cars, neither of which were close to empty.
Nationwide, U.S. gasoline prices average $3.52 per gallon, up 13.7 cents from a week ago and 76.9 cents from this time last year. In the Turlock area, gasoline averages $3.84 per gallon, up 16 cents in the last week and 58 cents from just a month ago, according to gas price tracking site ModestoGasPrices.com.
The sudden price hike at the pumps can be attributed in large part to political unrest in the Middle East and North Africa, the DOE said in a weekly report.
“For the people of Libya, with life, death, and the future of their country in the balance, the price of oil probably doesn't rank as a top concern at present,” the DoE wrote. “However, recent price movements suggest that the oil markets are closely following events in Libya and elsewhere in North Africa and the Middle East. Oil prices have risen from the first signs of disquiet in Tunisia to the fall of Egyptian President Mubarak to the violence and power shift in Libya, which has significantly disrupted that country's field production and exports.”
Libya produced about 1.65 million barrels of crude oil per day in 2010, amounting to about 2 percent of the world’s total supply. The ongoing political action in Libya has reduced that output to at most 700,000 barrels of crude oil per day, and some reports claim a “near total shutdown” of oil exports, per the DOE.
Though accounting for only 2 percent of the world’s oil supply, Libya’s oil holds more import due to the ease of processing the variety of low-sulfur oil found in its soil. While most of Libya’s oil is directed to Europe and China, some traditionally-U.S. bound oil producers such as Algeria and Nigeria may ship oil to Libya’s usual customers, reducing the supply available for America.
Egypt’s change in government also contributes to the surging price, as the country’s Suez Canal and SUMED pipeline are important to the transport of oil.
As gas prices have increased so drastically in recent days, more people are turning to public transportation. According to the American Public Transportation Association, public transportation now saves individuals, on average $9,904 annually and $825 per month – the highest savings for public transit riders in two years.
“As gas prices rise, using public transportation is the quickest way people can beat high gasoline prices,” said William Millar, president of the APTA.
But the U.S. government is already considering ways to drive the price of gasoline down, potentially releasing gasoline from the country’s Strategic Petroleum Reserve.
The reserve, started by the U.S. in 1975, holds 726.5 million barrels of crude in underground caverns along the Gulf Coast. Should a complete oil embargo occur, the SPR could fuel the U.S. for 39 to 75 days.
A presidentially-ordered oil “drawdown” has been ordered twice in the reserve’s history; from 1990 to 1991 during Operation Desert Storm and after 2005’s Hurricane Katrina, both to relieve market tensions.
“(This) has been done in very rare occasions,” White House Chief of Staff William Daley said on NBC’s Meet the Press Sunday. “There’s a bunch of factors that have to be looked at, and it is just not the price.”
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.
