Motorists in Southern California must be scratching their heads, wondering what happened after gas prices jumped 74 cents in just the past week to soar well over $4. The average price of regular gas in the Los Angeles area as of early Thursday was $4.28 a gallon, according to the AAA Daily Fuel Gauge Report. That was 8 cents higher than on Wednesday and 16 cents higher than a year ago. Premium gas was going for $4.45.
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AAA said refineries have been unable to keep up with demand for gas in Southern California, where more motorists rely on cars instead of public transportation than in some major urban areas. That, AAA said in a statement, "can lead to significant spikes in price when supply and demand are out of balance. Upward pressure is likely to remain on prices in the region until supply issues are resolved."
GasBuddy.com, which predicted a week ago that Southern California prices would spike, said the 74-cent jump is the fastest and largest increase it has seen. GasBuddy said the Golden State has relied heavily on imported oil in recent months to meet demand, but that source unexpectedly dried up at the same time more motorists took to the roads during the height of the summer driving season.
The price spike mainly affected the Los Angeles and San Diego areas, and increases were modest in other parts of the state in comparison. In San Francisco, for example, the average price for regular gas increased 12 cents a gallon the past week to $3.63. The big increases in heavily populated Southern California pushed the statewide average up 43 cents to $3.86, the highest in the nation.
Average prices increased by 8 cents the past week in neighboring Nevada to $3.28 and 10 cents in Arizona to $2.82, but other states seemed unaffected by California's plight. Alaska's average, for example, was unchanged at $3.48, and Idaho's at $3.05.
Pump prices in most states moved up or down only a couple of pennies, but they fell by 10 cents in Indiana to $2.65 and 11 cents in Michigan to $2.80. The cheapest gas could be found in South Carolina, where the statewide average declined 2 cents to $2.41. Arkansas, at $2.49, and Alabama and Mississippi, at $2.46, were the only other states averaging less than $2.50.
The national average for diesel fuel fell by a penny to $2.82, continuing a steady decline that has brought it within 4 cents of the national average for regular gas; the national average of $2.78 a gallon for regular was up 2 cents from the previous week. Diesel is $1.06 less than it was a year ago, and regular gas is 82 cents lower.
Despite the supply issues in California, AAA noted that recent political events could put more downward pressure on oil prices and, ultimately, on pump prices. European leaders agreed to a resolution of Greece's debt crisis, and the U.S. and other countries reached consensus on limiting Iran's nuclear capability. If Iran follows the terms of the agreement, it will be allowed to resume oil exports and add to the already plentiful global supply.
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