Gasoline prices in Morgan Hill averaged highs of $2.21 Monday
after a roughly 6-cent increase over the weekend. Gilroy prices
averaged nearly $2.23.
Gasoline prices in Morgan Hill averaged highs of $2.21 Monday after a roughly 6-cent increase over the weekend. Gilroy prices averaged nearly $2.23.
Gas prices across the country rose by slightly more than 10 cents per gallon in the past two weeks, the biggest jump since August, an industry analyst said Sunday.
Prices are at record highs.
There may be some relief in sight at the gas pumps, as Saudi Arabia’s oil minister Monday called on other oil-producing nations to increase production, reversing an output cut that began just last month. But oil-industry watchers were unsure how much and when an increase in production might lower prices at the pump.
Regular unleaded gas in Morgan Hill has cost more than $2 dollars since late February and now averages slightly lower, at $2.18, than the state’s $2.21 per gallon.
Gas was cheapest Monday at the new Arco station on Monterey at Cochrane roads ($2.13, $2.23 and $2.33) and highest at the Gas and Shop Gasoline at East Dunne and Condit Road ($2.21, $2.33 and $2.43).
In Gilroy it was cheapest Monday at Costco Wholesale on Camino Arroyo and Condil Company on Chestnut Avenue, costing $2.17. It was most expensive at Chevron near Tenth and Monterey streets, costing $2.33.
Motorists in Hollister found the average low price at $2.22 with $2.19 the lowest, except at Safeway where a store card would take $.03 from the price of a gallon.
Highes hovered at $2.29.
Ken Williams of Morgan Hill, filling up his Kia Sedona minivan at the Chevron station on East Dunne Avenue at Highway 101, said Monday afternoon that he was ambivalent about the rising gas prices.
“We just will have to deal with it,” Williams said. “With world-wide demand going up, with developing countries coming on line, like China, and with OPEC wanting to hold production at a certain level, the prices are going to be high.”
While the Kia gets between 20 and 22 miles to the gallon, Williams said his family finds themselves driving another, smaller car that gets about 30 mpg more often.
Williams said he didn’t think the war in Iraq had much to do with prices but wondered about the gas companies.
“That’s the sticking point,” he said, “especially in California. We are so close to the refineries and still have the highest prices in the nation – you can’t help but think some gouging is going on.”
“I’m definitely feeling (the increase),” said Eva Lopez, filling up at the Shell station on Gilroy’s Monterey Street at U.S. Highway 101. “I’m wondering if it’s ever going to get better.”
The weighted national average for all three grades of gasoline was just over $1.96 per gallon on Friday, according to Trilby Lundberg, publisher of the biweekly Lundberg Survey, which regularly polls 8,000 gas stations across the country.
Gasoline prices traditionally rise near the Memorial Day weekend, the unofficial start of the summer vacation season.
Tight gasoline supplies and rising demand at a time when seasonal environmental regulations cause a price adjustment are responsible for the 10 1/3-cent price rise, Lundberg said.
“Those regulations have both a cost and supply impact on refiners,” said Lundberg. “We get less gasoline out at a higher cost just when we need more of it. Meanwhile, tighter regulations make it tougher for importers to bring in additional supplies.”
The nation’s economic growth has also increased demand, contributing to the rising prices, Lundberg said.
The average price of gasoline has broken all-time record highs for two months straight, although the average price remains about 90 cents a gallon lower compared to the peak gas price in March 1981 when adjusted for inflation, Lundberg said.
Crude oil prices reached a 13-year high of $40 a barrel on Friday, the highest since Oct. 11, 1990, in the run-up to the 1991 Gulf war. Prices for crude oil and for gas at the pump are unlikely to decline anytime soon, Lundberg said.
The national weighted average price of gasoline at self-serve pumps on Friday, including taxes, was about $1.93 for regular, $2.02 for mid-grade and $2.11 for premium.
Some stations are changing everytime a new load of fuel is delivered.
The change in policy, Oil Minister Ali Naimi said, is due to concern that high prices could hurt the world economy and reduce demand for oil.
Naimi said the increase, which he planned to propose at a June 3 meeting of the Organization of Petroleum Exporting Countries, should “not be less than 1.5 million barrels a day.”
That would more than offset the 1 million barrel-a-day cut in OPEC’s production target that went into effect April 1. However, a boost in the production ceiling might have little real effect, analysts said, as most OPEC countries are producing well over their quotas.
OPEC pumps about a third of the world’s oil, and Saudi Arabia is its biggest producer and de facto leader.
Crude oil prices briefly plunged after the announcement.
OPEC currently has an official ceiling of 23.5 million barrels a day, but analysts and some officials say OPEC countries are producing more than 2 million barrels a day above that. Other than Saudi Arabia, few OPEC countries have the capacity to quickly increase output, so a higher ceiling would effectively legitimize some of the overproduction instead of adding a lot of fresh crude to global supplies.
“I remember the gas lines of the 1970s,” Williams said. “It was scary and here we go again – we’ve made no progress toward alternative energy.”
