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State Gas Prices Down 35 Cents Since Peak

Posted on: Monday, 7 November 2005, 18:00 CST

By Glennda Chui, San Jose Mercury News, Calif.

Nov. 7--The price of gas in California has dropped 35 cents a gallon since Hurricane Katrina disrupted oil production in the Gulf Coast, according to a AAA survey of 85,000 gas stations nationwide.

The average cost of regular unleaded -- the grade used by the overwhelming majority of motorists -- was $2.70 a gallon in California on Sunday. That's down from a peak of $3.05 10 days after Katrina.

Nationwide, the average price of regular unleaded fell 66 cents, from $3.06 to $2.40 on Sunday, the association said.

While motorists at a busy Shell station at North Capitol Avenue and Hostetter Road in San Jose welcomed the dip, they said it's not nearly enough to ease the pain in their wallets.

"It really doesn't make a difference," said Dean Nguyen, 50, of San Jose, as he filled his Lexus. He said his work as a real estate appraiser forces him to drive all over the Bay Area, and his gasoline bill still totals about $500 a month.

California continues to have some of the highest gas prices in the nation, topped only by Hawaii, where the average cost of a gallon of regular was $2.80. The cheapest gas was in Missouri at $2.13 a gallon.

But when prices spiked after Katrina hit in late August, the state suffered less than others, said Sean Comey, a spokesman for AAA of Northern California. The peak price was three cents a gallon cheaper in San Jose and a penny a gallon cheaper in California than it was nationwide.

"Typically, our prices are higher," Comey said. "But the effects of the hurricane were much more extreme in other parts of the country. So as bad as it was here, it was worse there."

Part of the decline may be seasonal, Comey said, because people tend to drive less in the fall, after vacation season has ended.

Still, he said, prices are much steeper than they were at the start of the year, when gas cost less than $2 a gallon.

There's such a fine balance between supply and demand that any decrease in gasoline consumption will drive down prices, he said: "If all of us just saved a couple of gallons a month from what we normally used, that would have a big impact. You don't need to radically alter your lifestyle."

In Silicon Valley, the cost of a gallon of regular on Sunday ranged from $2.49 to $2.95, according to sanjosegas prices.com, a Web site that allows members of the public to post gas prices.

The Lundberg Survey of retail gas prices, which canvasses 7,000 self-serve stations nationwide, had slightly different figures, according to an Associated Press report on Sunday.

It concluded that the average price of regular was $2.65 in California, with the best deals in Fresno and the worst in San Diego. The nationwide average was $2.43 a gallon.

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

Distributed by Knight Ridder/Tribune Business News.

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Source: San Jose Mercury News

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