Lull in gas prices could be temporary
| Saturday, Jan 23 2010 12:00 PM
Last Updated Saturday, Jan 23 2010 12:00 PM
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Henry A. Barrios / The Californian "It is what it is, it's a fact of life," said Dennis Christy as he filled up the tank of his Toyota Corolla at the Arco station on Buck Owens Boulevard. He doesn't see the fluctuation of gas prices as a problem.
Henry A. Barrios / The Californian The price of a sale of gas is displayed at an Arco pump during a recent visit.
Henry A. Barrios / The Californian Jenny Castellanos who drive in to Bakersfield from Delano to work recent bought a vehicle that gets better gas mileage.
Henry A. Barrios / The Californian Jenny Castellanos who drive in to Bakersfield from Delano to work recent bought a vehicle that gets better gas mileage.
That wasn't just resignation in his voice as Bakersfield construction worker Dennis Christy filled his tank with gasoline priced at close to $1 more than what it cost this time last year.
No, there was also a hint of fatigue from a man who has seen far worse than this month's up-and-down gas prices.
"Three cents one way or the other, that's not a rise. That's nothing," he said Thursday while filling up his 28-mile-a-gallon Toyota Corolla at an Arco station downtown. "It's when it goes up 20 to 30 cents that it starts to get your attention."
Things could certainly be worse, like when a gallon of unleaded cost as much as $4.56 on average in Bakersfield in summer 2008. But what consumers might want to keep in mind is that no one can guarantee that recently mild gas prices are here to stay.
People who study the industry say irregular factors have conspired over the last month or more to keep pump prices relatively low. These include a weak dollar, the slow economy and mistaken Wall Street investments.
Looking forward, looking back
There are indications that gas prices could soon start edging upward. The U.S. Energy Information Administration predicted earlier this month that crude oil prices would climb as the economy improves and demand for fuel rises this year and next.
The administration's forecast calls for the nation's average gas price to top $3 a gallon this spring and summer. It said this year's average would be $2.84 -- a 21 percent jump over last year's average -- then reach $2.96 in 2011.
Monday's national average was $2.74 a gallon, according to the administration.
Local gas prices, which are dependably higher than the national average, have moderated somewhat over the past week. But they're still up noticeably over a month ago.
AAA reported that the average price of regular unleaded in Bakersfield Friday was $3.08 a gallon, down about 2 cents from a week before.
A month ago the city's average was $2.95, or about 4 percent less than it was Friday. A year ago, $2.15 was Bakersfield's average gas price.
Contributing factors
"A couple things are happening," said a spokesman for the Automobile Club of Southern California, Jeffrey Spring. First, he said, the value of the dollar has dropped relative to other world currencies, and that has the effect of raising the price of commodities like gasoline.
Oil prices are having an impact as well. There was a fairly steep run-up in crude prices between mid-December and early January -- from $62.75 a barrel for local heavy crude on Dec. 15, to $75.75 on Jan. 6, according to ChevronTexaco. Although national oil prices tend to be higher, they generally follow the same trends.
Since the middle of this month, though, oil has settled at a steady price. Spring said that has caused investors to take their money out of oil futures, which can leave refineries with a better price.
"If the price of oil goes down, the cost of refining it goes down," he said. And so do prices at the pump, he added.
Normally California gas prices increase at this time of year because of the upcoming switch from winter to summer fuel blends, said Dave Hackett, president of Irvine energy consultancy Stillwater Associates.
He said that hasn't happened so far this month -- and might not occur at all this winter -- because statewide gasoline inventories are up by as much as a fifth.
He theorized that this apparent overstocking of gasoline occurred because large investors bet that a new air emissions rule change in Sacramento would raise refining costs and produce a spike in prices that would give them a nice profit.
"So far there's been no spike," Hackett said.
Feeling it locally
Competition among gas stations acts to keep down prices, too. Sometimes station owners make money on gas and sometimes they lose.
Ajit Bhattal, owner of the 24/7 Travel Plaza on Weedpatch Highway, said he was able to earn a few cents a gallon on gas sales this week thanks to a good price from his supplier. But often his only profit comes from sales inside his convenience store, he said.
Bhattal said it's impossible for him to tell one week to the next which way prices are headed.
"Crazy market," he said. "We can't predict."
About a month ago, dental assistant Jenny Castellanos recently made a gas-related investment of her own. She bought a new car so she didn't have to keep driving the Ford F-150 that she said was getting about half the mileage as her new Toyota Camry.
That's important, considering that she drives from Delano to Bakersfield five times a week for work.
"Imagine driving back and forth," she said. "It was killing me."
