• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Accelerating Gas Prices Hit $2.65 a Gallon

Posted on: Tuesday, 9 August 2005, 18:01 CDT

Aug. 9--Just in time for the final month of the summertime driving season, gasoline prices are soaring to record levels in the Bay Area and elsewhere.

The rising price of crude oil caused gas prices to jump across the country in the past 48 hours. It hit an average of $2.65 a gallon Monday in San Jose, a record for the city.

Statewide, the average gallon of unleaded regular cost $2.64 on Monday, a jump of five cents from the previous week.

Patty Ellingson stopped at the 76 gas station at First Street and Brokaw Road on Monday afternoon to fill up her rental car before returning it at the airport and flying home to Minneapolis.

"You have to budget for gas now when you go on a trip," said Ellingson, who was stunned to pay $2.71 a gallon -- a big jump from the $2.09 she was paying in Minnesota. "Gas is a lot higher in California than it is in Minnesota."

And gas is a lot higher in California now than it was a year ago, when it averaged $2.09 in San Jose. For someone filling up the family minivan, that's a difference of about $11 per tankful.

Higher fuel prices eventually will mean higher prices for most consumer goods, and likely will turn casual shoppers into a much more discriminating variety.

"We urge people to shop around and look for the least expensive gas you can buy," said Rob Schlichting, a spokesman for the California Energy Commission in Sacramento. "Vote with your dollars and help bring the price down. And don't buy premium if you don't need it."

Schlichting also advised that drivers plan their local trips much more carefully, and consider carpooling.

Numerous factors have affected crude-oil prices -- from security jitters in oil-rich Saudi Arabia, continued concerns about terrorist attacks, the energy demand of the slowly recovering U.S. economy, and rising global demand from countries like India and China.

Crude traded near a record $64 a barrel Monday. As a result, the price of gas increased across the United States.

But the pain isn't just at the pump. The rising price of gas -- including diesel, which hit record levels in California last week and continued to rise to $2.98 a gallon on Monday -- affects everything, from the ability of farmers to get their fresh vegetables to market to trucking, manufacturing, and the cost of imported goods.

"When you are filling up your tank, that's just the beginning," said Sean Comey, spokesman for AAA of Northern California. "There's a ripple effect on the entire economy."

There's no sign that people are trading in their gas-guzzling SUVs for hybrid vehicles just yet: The operators of Silicon Valley Hummer on Stevens Creek Boulevard said Monday that the only people trading in Hummers at their location were buying new ones.

But industry observers say that consumers are increasingly interested in fuel economy when it comes to purchasing new cars.

"There has been a gradual but significant shift in buying patterns," said Comey. "Miles per gallon used to not be important, but that appears to be changing.

"Is someone going to trade in a Hummer for a Prius? Probably not. But people who own older SUVs may consider a more fuel-efficient car when it comes time to buy."

-----

To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.mercurynews.com.

Copyright (c) 2005, San Jose Mercury News, Calif.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: San Jose Mercury News

More News in this Category