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Regular unleaded at a local Shell station in Emeryville was five cents higher than the statewide average on Thursday of $2.84 a gallon. This price appears as oil prices set a new high for the year. The benchmark crude was up $2.69, settling at $68.81 a barrel. Experts say one factor was the first drop in unemployment since January.
"The higher price of gasoline right now is in part the strong economy driving up oil prices and in part, the strong summer demand for gasoline driving up refinery margins," says Severin Borenstein from the UC Energy Institute.
"Also, now we've switched over to the summer blend versus the winter blend which brings it an added coast which is then passed on to the consumer," says Matt Skryia, a AAA spokesman.
At some gas stations, its already $3 a gallon, but motorists seem resigned to higher prices.
"You just got to deal with it. You can't do nothing about it but complain, you know," says Brandon Shipman, a motorist.
"It was up to $5 at one point so I'm just grateful for little things, right? But what choice do we have?" says Rob Baxter, a motorist.
Joe Sparano heads the Western States Petroleum Association -- a group that represents oil companies. He says charges of gouging are nonsense. Sparano admits their revenues are big but much of that money goes back into exploration, production and energy investments. He says their profits compared to total revenues are smaller than the public thinks.
"In the first quarter of this year, we earned a nickel and a half on the dollar. The Dow Jones Industrial earned just over 10 cents on the dollar," says Sparano.
There is some good news for motorists this summer. AAA predicts that even though the price at the pump will reach $3 and more. It won't go anywhere near $4 like it did last year.
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