Gas Prices Jump 11 Cents
By Gary Richards, San Jose Mercury News, Calif.
Oct. 3–Gas prices soared 11 cents nationwide over the weekend, a sign that the country’s overtaxed refineries are having trouble cranking out enough fuel despite a glut of oil on the worldwide market and a major drop in sales at the pump.
Americans were paying an average $2.92 a gallon for self-serve regular on Sunday, up from $2.81 on Thursday, according to the AAA. Prices also inched up several cents over the past three days in California and the South Bay to $2.98.
It’s worse for drivers who own diesel cars and transit agencies whose buses run on diesel. That average price in California climbed to $3.39 a gallon Sunday, up 19 cents from a day earlier and four-tenths of a cent lower than the diesel record set on Sept. 8.
“The price of diesel has gone crazy,” said Jerry Cummings of Rotten Robbie, calling them the “biggest one-day increases we have ever seen. It looks like we will be in for higher prices and lots of volatility.”
Prices should be dropping. Refinery damage from Hurricane Rita in the Gulf of Mexico wasn’t as severe as feared. And the nation’s drivers — stung by prices that for the first time hit $3 a gallon from Iowa to New York after Hurricane Katrina’s fury late last month — have eased off the pedal. Demand in the United States is down by 200,000 barrels a day from a year ago, one of the biggest declines in more than two decades.
But there are other worries. Eleven refineries in Louisiana and Texas remain closed, damaged by the dual wallop of Katrina and Rita. That’s idled more than 10 percent of U.S. production.
On Sunday the National Hurricane Center raised the possibility that tropical storm Stan could rise to hurricane status in Mexico’s Yucatan Peninsula. And BP is expected to shut down and remodel dozens of oil wells on Alaska’s North Slope to make safety upgrades, a shutdown that will reduce production by 20,000 barrels a day.
“We’ve seen some serious problems at U.S. refineries recently that may have been due in part to the strain of operating at high output levels for long periods of time,” said Sean Comey of the AAA in San Francisco. “It’s kind of like throttling up your car to just below the red line on the tachometer. The engine can handle the extra work in the short term, but the punishment eventually takes its toll.”
Washington, D.C., drivers are paying the most for the average tank of gas: $3.12. Drivers in North Carolina are paying $3.06 a gallon, the same as in San Francisco.
The high prices meant brisk business Sunday at Costco in Santa Clara, where self-serve regular listed for a “cheap” $2.89 a gallon. The store’s 12 pumps were constantly flowing, with cars lining up 10 deep in six lines. Many motorists seemed resigned to paying nearly three bucks a gallon, a figure they don’t expect to see drop anytime soon.
“We have to live with it, I guess,” said Wayne Tran, 40 of San Jose, as he waited in his 2003 Toyota Corolla.
Claire Hayes had a thirstier tank to fill: a 2000 Ford Mustang, a gas hog, she admits. She has paid as much as $7 a gallon in her native Ireland and “didn’t mind getting a car that guzzles gas because gas was so cheap” when she moved to the United States six years ago. She is a 34-year-old accountant.
Tran and Hayes don’t know each other, but they share something in common. Both say these high prices have them looking to buy a hybrid.
“Definitely thinking about it,” Hayes said.
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