Gas prices stop rising, could take time to fall

October 10, 2012 7:18:33 PM PDT
The California gas crisis may be far from over. The average price has fallen by half a cent to $4.67 a gallon. But San Francisco, Los Angeles, and San Luis Obispo still have prices of $4.70 and higher. Oakland and San Jose are sitting right at the statewide average of $4.67. ABC7 News takes a look at why prices probably won't come down as fast as they went up.

You can credit Jay McKeeman, who represents the state's Independent Oil Marketers Association, for stopping gas prices from going any higher. McKeeman convinced the governor and regulators to let refiners produce winter blend fuels earlier than normal, but it's going to take a few more days to get that cheaper supply to consumers and bring prices down further.

"Another problem in terms of prices is that fuel merchants have purchased the more expensive gasoline, so they have to sell that," said McKeeman.

Just as prices appear to be on the verge of decreasing, there's worry about that Chevron refinery in Richmond that's had to cut production since early August because of a massive fire. The company now says one unit will be out for the rest of the year. Some industry experts worry that's a sign supply will remain tight and keep prices high, but the California Energy Commission is optimistic.

"The good news is the market has already adopted to that refinery not producing at normal levels, and further, gasoline demand between now and December will continue to decline," said Gordon Schremp from the California Energy Commission.

McKeeman warns, though, these high prices we've seen lately may be the new norm in the coming months. New global warming regulations and a low carbon fuel mandate taking effect soon may make drive prices back up.

"We're asking the governor to take a time out on these regulations and make sure we've studied them for all the potential price implications and unintended consequences," said McKeeman.

"This is my dream car. I drive it all the time," said "Wild Bill" Hill.

Hill is watching the market fluctuations in stride. He's been a gas miser for a long time. His 1959 Messerschmitt holds only three gallons, but it cost him just $13 to fill up last time.

"The gas mileage is right around 98 miles to the gallon, and I can definitely appreciate it now that gas prices are sky high," said Hill.

On the heels of Sen. Dianne Feinstein, D-Calif, and Sen. Barbara Boxer, D-Calif., calling for an investigation on gas prices at the federal level. St. Sen. Mark Leno, D-San Francisco, is asking for the same in the Bay Area. Hearings will be held next month.


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