Gear Up for High Gas Prices This Summer: Prices May Be About 10 Percent Higher Than Last Season Because of Political Turmoil, Weather and Crude Oil Costs, Agency Says

By Rick Jurgens and Linda Davis, Contra Costa Times, Walnut Creek, Calif.

Apr. 12–Memo to motorists tired of paying high prices for gasoline and diesel fuel from the federal government: Get used to it!

Gasoline prices throughout the nation are expected to be about 10 percent higher this summer than last, according to the U.S. Energy Information Administration’s annual driving season forecast released Tuesday.

The forecast is the product of a series of educated guesses about future events that include oil well development, political turmoil and the weather.

The biggest guess is about the future cost of the main raw material used to make motor fuels. “It all depends on what happens with crude oil prices,” said Rob Schlichting, a spokesman for the California Energy Commission.

A gallon of regular gasoline will sell, on average, for $2.62 during the peak summer driving season, according to the EIA. That’s up from $2.37 a year ago, boosted by higher crude oil costs and tighter pollution standards that are expected to increase refining costs and reduce gasoline supplies.

The EIA forecasters also cast a worried eye at the Gulf of Mexico, the heartland of American oil production and refining where during the past two years hurricanes shut down oil and natural gas wells and damaged key gasmaking facilities. “News of any developing hurricanes and tropical storms with a potential to cause significant new outages could add to volatility in near-term prices in the latter part of the summer,” the EIA said.

Prices are already high. Refinery maintenance and high crude oil prices pushed the nationwide average gasoline price up to $2.68 last week, 10 cents higher than a week earlier, according to another EIA report. In the Bay Area, the average price last week was $2.81 a gallon, up a nickel from a week ago and up $2.63 from last year.

Some consumers have reacted by seeking alternatives to conventional gasoline-powered vehicles. At Dublin Toyota, 51 people are now on the waiting list to buy a Toyota Prius hybrid, sales manager Travis Pepe said Tuesday. “They cannot make them fast enough,” he said. “If I had 100, I could sell them this month.”

Pepe said demand for the Prius, a gasoline engine and electric motor-powered vehicle that gets 60 miles per gallon in the city and 51 mpg on the highway, has steadily increased since he came to the dealership in June. “The gas (price) surge is definitely piquing people’s interest,” he said.

Kristin and Andy Hertz of Livermore said they bought their 2005 Prius after their previous car wore out and gasoline prices rose. “Some of my friends said the hybrid is gutless, but we’re satisfied,” said Kristin Hertz. “It’s roomy, quiet and comfortable, with power uphill.”

And, her husband added, “When gas goes up, we don’t care.”

In fact, a lot of motorists seem unfazed by higher prices. The EIA expects gasoline consumption to increase 1.4 percent from last summer. Diesel fuel consumption is expected to grow at an even more robust 3.5 percent.

U.S. demand is a big contributor to the rapidly growing global appetite for energy, with the hard-charging economies of China and India frequently cited as other key drivers. Schlichting said that the Middle East — where petrodollars have boosted consumer demand for fuel — and the U.S. military’s fuel demands should be added to that list.

Oil producers are scrambling to keep up. Additional output expected this year from Saudi Arabia, Angola, Central Asia, Canada and Brazil will just be enough to offset production declines and outages elsewhere and keep pace with a 1.6 million barrel a day increase in demand for oil, the EIA said. Total worldwide consumption was 83.2 million barrels a day in 2005.

The continuing delicate balance between supply and demand raises the risk of price spikes if any major outages occur in the global oil market, where current prices reflect concerns that events in Nigeria, Iraq or Iran could reduce crude oil production, the EIA said.

Said Schlichting, “The crude oil (price) increases seem to be driven by fear more than anything else.”

Other factors have put upward pressure on prices. In much of the United States, new standards for cleaner gasoline are expected to pose problems for producers and distributors, pinch supplies and drive up prices. Tighter sulfur emission rules will add about 2 cents a gallon to the cost of gasoline and 5 cents to the cost of diesel, the EIA said.

That could give Californians miserable about paying some of the country’s highest prices for gasoline some company, Schlichting said. Most of the new standards are already in effect in California, and with the state’s refineries already geared to produce the cleaner fuel, the state’s motorists could be insulated from some price bumps.

Rick Jurgens covers energy and business. Reach him at 925-943-8088 or at rjurgens@cctimes.com.

Gas Saving Tips

The best way to reduce gas consumption is to implement small changes that will add up to savings in the long term.

“Buying gasoline is not making an investment in anything,” said Diane MacEachern, author of “Beat High Gas Prices Now.”

Saving gas helps the environment and consumers’ pocketbooks, she added.

Here are some specific tips:

— Avoid short trips and combine multiple errands into one trip. Sudden stopping and starting eats up gas. Try finding a shopping center where you can take care of all your needs such as stopping at the grocery store, post office and bank.

— Drive slowly because the faster you drive, the more gas you burn. Budget ample time to arrive at a destination. Using the cruise control feature can increase fuel efficiency by as much as 14 percent because it helps maintain a steady speed. When slowing down, cruise to lower speeds instead of relying on the brake.

— To avoid driving at all, walk, bike, or use a scooter or moped for short-distance trips. Talk to your boss about working from home one day per week.

— Avoid driving in heavy traffic at all times. Saving shopping trips for evening hours can help. Another option is to adjust your work schedule to drive before or after rush hour.

— Buy a fuel-efficient car such as a small or hybrid vehicle. More carmakers are rolling out hybrid models, giving consumers more of a selection. Hybrid models also come with a tax credit.

— Buy the least expensive gas you can find, but don’t waste gas by driving to a distant station just to save a few cents. Check for lowest-priced stations at http://csaa.kivera.com/csaa/gaspricefinder.jsp. Some experts also recommend filling up in the morning because gas expands as temperatures rise during the day.

— Maintain your car. Frequent oil changes, replacing spark plugs and air filters on time, and tune-ups can improve your fuel efficiency. Also, keep your car as light as possible by not carrying unnecessary weight. Avoid wasting gas on using the air conditioner or sitting with the engine idling at places such as drive-through restaurants.

— Use public transportation or other services such as car pool or van pool programs. A local transit authority, 511 Contra Costa, offers incentives such as $60 gas cards for people who start new car pool groups. For details, visit www.511contracosta.org, or www.511.org for Alameda County information.

“If you’re commuting and you’re not car pooling or using BART, just light your money on fire,” MacEachern said.

Some people complain that mass transit is not useful or effective, she said, but then residents should advocate for better systems in their communities.

Sources: AAA California and “Beat High Gas Prices Now” by Diane MacEachern

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Copyright (c) 2006, Contra Costa Times, Walnut Creek, Calif.

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