Gas prices begin ‘preseason rally’

SAN FRANCISCO – Gasoline prices have jumped above $3 a gallon in some parts of California and Hawaii and may hit that level in other parts of the country when the busy summer driving season approaches.

“It kills me,” said Gloria Nunez, 53, as she filled her Ford Explorer SUV at a San Jose gas station. Nunez, a clerk for a communications company, has started working a couple hours of overtime each week to help soften the blow.

“All of a sudden you kind of have to watch your pennies,” she said.

Analysts say drivers should brace for more increases in the coming weeks. Crude oil, which makes up about half the price of gasoline, is trading above $60 a barrel. Higher demand, refinery maintenance and fears about springtime shortages are also driving up prices, particularly on the West Coast.

“The West Coast will certainly be the wild, wild West this year,” said Tom Kloza, chief oil analyst for the Oil Price Information Service. Extensive maintenance work at West Coast refineries has curtailed supplies and exacerbated the typical “preseason rally” spurred by jitters about tight supplies.

“In the rest of the country it’s just petro-noia. They’re worried that they won’t have enough gasoline,” Kloza said. “But on the West Coast the concern might be warranted.”

However, analysts said it’s unlikely other parts of the country would see $3 gasoline before summer without a major disruption in supply.

Average fuel prices are still below their historical highs – most of which were set in 2006 – but are inching higher weeks earlier than usual.

Wailuku, on the Hawaiian island of Maui, currently has the highest average price for a gallon of regular unleaded at about $3.20.

On the mainland, the title goes to San Francisco, where a gallon averages $3.10, a jump of about 34 cents from a month ago but still off the high of $3.36 set in May 2006, according to the AAA Daily Fuel Gauge Report for Wednesday.

The California cities of Santa Barbara, San Luis Obispo and Oakland are also all above $3 a gallon. Most other areas of the state are just a few cents away from cracking that milestone, and motorists say they’re cutting back to save money.

“I take the bus,” said Hector Esqueda, an 18-year-old justice administration student from Los Angeles who has stopped driving his gas-guzzling, older-model Lincoln Continental to save money. “Other people are doing the same thing. The bus is packed.”

Nationwide, the average price for a gallon of regular unleaded is up about 32 cents from a month ago, to $2.50, according to the AAA report. That’s more than 55 cents shy of the all-time high recorded in September 2005, after hurricanes Katrina and Rita damaged the Gulf of Mexico refinery infrastructure.

Part of the reason is rising demand. The U.S. Energy Information Administration said Wednesday that gasoline demand has averaged more than 9.1 million barrels per day over the past month, a 3.3 percent jump over the same period last year.

Oil prices jumped by more than $1 per barrel on Wednesday, settling at $61.82, after the agency also reported an unexpected drop in crude oil inventories as import levels reached their lowest point since 2005.

Across the country, drivers are grappling with how to manage the sudden spike.

Outside a Sunoco convenience store in downtown Philadelphia, T.J. Hawk, a 45-year-old retired Philadelphia police officer, recalled the good old days when it cost $5 to fill the tank.

These days, it takes at least $40 to fill his white Volvo. Most weeks, he only fills it three-quarters of the way to soften the hit to his wallet.

Several customers at a Mobil station in St. Petersburg, Fla., were upset because there seemed to be no real reason for the price increase. Prices at the station range from $2.47 a gallon for regular to $2.69 for premium.

Lee Franc, a client manager from St. Petersburg, spent about $40 to put 16 gallons in her Toyota Highlander. She works at home and can go a week or two without filling up.

“Katrina, I can understand,” Franc said. “I didn’t see a very good explanation this time. You hear so many excuses it gets to where you don’t believe anything anymore.”