$3 Gas

L.A. Daily News ^ | 5/11/2004 | Brent Hopkins and Dana Bartholomew

[Rutles4Ever]

MALIBU -- Gasoline prices virtually hit the once-unthinkable $3-per-gallon mark Tuesday at a Malibu service station used by Johnny Carson and other TV and movie stars, but some experts warn that all drivers could be paying that much by summer.

Motorists opting for full-service premium at Charlie's Union 76 station on Pacific Coast Highway paid $2.999 a gallon. And in Santa Barbara, full-service pump prices hit $3.11 a gallon, considerably higher than what most motorists are paying in Los Angeles.

According to the Automobile Club of Southern California, a gallon of regular rose Tuesday to an average of $2.251, while diesel customers paid $2.505, both record highs.

By August, when vacationers take to the freeways for the peak driving season, the nearly universal opinion of experts is that things will get worse. More and more gas watchers say a $3-per-gallon average is possible.

"You've got increasing demand and the refiners aren't making enough gasoline, so prices keep going up," said Bob van der Valk, a wholesaler with Santa Fe Springs-based Cosby Oil.

"They may drop a little now, but after Memorial Day, who knows? There's no precedent for how things are right now."

Making things worse, traders on Tuesday pushed the price of oil above $40 a barrel for the first time since the 1990 Gulf War, prompting the federal government to say gas prices across the nation are likely to remain at today's elevated levels throughout the summer.

Motorists said they have little choice but to dive deeper into their wallets.

"I cannot change my habits if I wanted to. I have to work," said Hamid Banaie, a computer programmer who drives 100 miles a day for work.

Some, however, said they were rethinking summer vacation plans.

"We usually drive to Sea World, but we won't be doing that as often," said Anna Cohen, a 34-year-old real-estate agent from Tarzana who spent $50 to fill her 2002 Lincoln Navigator.

For many celebrities who roll into Charlie's Union 76 in Malibu, paying $2.999 a gallon for premium full serve isn't such a big deal, clerks say. Customers, like Dick Van Dyke and Carson, often pay more to have Carlos Ruiz, a Union 76 clerk from Van Nuys, top off their tanks, wash their windows and check under the hood.

More than 30 customers had paid for full service at Charlie's by 4 p.m. Tuesday.

"It's embarrassing to be too damn lazy to get out of the car and put $60 in gas" in it, Walter Rosenthal, 62, of Malibu said while Ruiz pumped 22.8 gallons of mid-grade regular into his Toyota SUV. The tab: $68 even.

Gas prices are also cutting into the profits of local entrepreneurs.

Rosalio Patlan, 32, who owns a gardening business, looked exasperated as he explained that the $2,800 monthly profit he splits with another worker is being eaten away -- at least 20 percent -- by gas prices.

It costs him at least $30 a day to fuel the leaf blower, lawn mower and hedge trimmer he uses to manicure dozens of West Valley lawns.

"If this continues, I am going to have to charge my clients more. Clients don't want to pay and I am going to lose business," said Patlan, a Pacoima resident. "I don't know what I will do if I have to pay $3 a gallon."

Even if refineries return to full capacity, demand is actually increasing over last year, providing unrelenting pump-price pressure. With Shell Oil planning to shut down its Bakersfield refinery by summer's end, things are likely to get even tighter.

"I'd love to see the oil and gas companies begin to do the responsible thing, including looking at their own policies on stocks and looking at their own margins so they can make the ones they historically made, not the windfall levels they've been enjoying lately," said Adam Goldberg, a policy analyst for the consumer group.

, Staff Writer Rachel Uranga contributed to this story.

[Rutles4Ever]

This will be a bigger obstacle for Bush than Iraq.

[1Old Pro]

a Malibu service station used by Johnny Carson and other TV and movie stars

I'm sure it's really hurting their wallets.

[Numbers Guy]

I don't even know where to find full-service premium gas (outside of Oregon and New Jersey that is).

[Puppage]

Gasoline prices virtually hit the once-unthinkable $3-per-gallon mark Tuesday at a Malibu service station used by Johnny Carson

Oddly, they never complain of paying $5 for a cup of coffee at Starbucks.

[KevinDavis]

Maybe if they lower some of the Gas taxes prices will come down.

[Dane]

This will be a bigger obstacle for Bush than Iraq

Actually there are many factors, such as refinery capacity, envirowhackos pushing through regulations for different blends of gasoline for different parts of the country, and Kerry and the demos blocking Bush's energy plan and drilling in ANWR.

Also the below link, which I tend to agree with shows that the saudi's may be trying to influence the election.

The Saudi War on George Bush

[Rutles4Ever]

The cost of businesses to consume fuel will be passed on to you and me. It's not about whether they can afford it or not. This is how the inflation ball gets rolling. Watch what happens with the summer hotel industry. Also, watch for airlines to feel the crunch shortly, as well, and they're not exactly swimming in financial strength...

[Rutles4Ever]

I agree. After 9/11, I remember Illinois suspended the gas tax to prevent prices like these.

[1Old Pro]

Watch what happens with the summer hotel industry

Hopefully they'll lower their room rates to attract people to drive to their location.

[Steve_Seattle]

Yet, according to Bob Woodward, Bush and the Saudis had a pre-war agreement to suppress oil prices to help Bush win re-election. My intuitive feeling was just the opposite, that OPEC would raise oil prices to hurt Bush, and that seems more like what's actually happening.

[Publius6961]

BUMP

[KevinDavis]

Also in 2000 they suspended the gas tax to prevent prices from going high.. I doubt that Blago is going to do that though.

[ladtx]

Wow, I just paid $1.72 two days ago in Plano (DFW metroplex) and thought that was bad.

[Steve_Seattle]

Oddly, they never complain of paying $5 for a cup of coffee at Starbucks.

Or $30-40 for a one-ounce cartridge of printer ink.

[reagan_fanatic]

Oddly, they never complain of paying $5 for a cup of coffee at Starbucks.

You usually don't buy 20-30 cups of coffee at one time, do you?

[Dane]

My intuitive feeling was just the opposite, that OPEC would raise oil prices to hurt Bush, and that seems more like what's actually happening

See the link in reply #6.

[Peter J. Huss]

Malibu service station used by Johnny Carson and other TV and movie stars

Do they get 'special' gas? Do they only serve imported premium unleaded? Does the stuff come in bottles topped with corks?

[Rutles4Ever]

OPEC insists it can't do anything to stop the coming supply/demand hit. Saudi Arabia pledged to try to increase output, and oil is now trading near $41. It's a vicious circle. Markets are fearing a Kerry presidency and potential hostility to the oil industry.

[ColoradoSlim]

The sooner US gasoline suppliers start blending and selling more ethanol, manufactured from American grown corn, into gasoline the sooner we can wean our selfs off the Saudi oil teat. Corn oil can be blended into diesel fuel too. What in the good lords name is the dang hold up?

[Puppage]

You usually don't buy 20-30 cups of coffee at one time, do you?

Oh, I see.....it's not the price, it's the quantity, hmm?

You could rationalize anything with that mentality.

[atomicpossum]

Random thoughts:

1. How much of the increase in crude prices is due to the lower value of the dollar?
2. Why do refiners suddenly claim they are caught unaware by demand, which seemingly happens every year? Is this a case of convenient blindness?
3. It seems to me that if you commute 100 miles every day, you've made a lot of your own problem.
4. It seems to me that if we depend so much on foreign sources, we've also made a lot of our own problem.

[Dane]

OPEC insists it can't do anything to stop the coming supply/demand hit. Saudi Arabia pledged to try to increase output, and oil is now trading near $41.

Then why did they cut production in the first place at the beginning of April. Like I said alot of things of converging to push up gas and oil prices. The saudis are doing their part.

It's just my opinion but the house of saud does not want to see a free and democratic Iraq.

[ItsTheMediaStupid]

Gas is only $1.80 something in GA!

[T'wit]

Big deal. The last six-pack of water I bought came to about $8.00 per gallon. Gasoline remains a bargain.

[Rutles4Ever]

That's great if you live within five or six hours of the hotel. That's not great if you have a family of four, live in New York, and planned on driving to Disneyworld.

[ClearBlueSky]

Milk- New Orleans area- $4.89 a gallon.
Where is the outrage?

[umgud]

My company operates over 250 large trucks. We add a fuel surcharge to all our invoices. We use a base rate of $1.65/gal (May '03) and add an according % to calculate the surcharge. This currently adds about $10 per hour for the cost to operate a truck. Most of the vendors we do business with add energy recovery fees to their invoices. If fuel rates stay at or near current levels, expect everything to cost about 10% more.

[GraniteStateConservative]

"We usually drive to Sea World, but we won't be doing that as often," said Anna Cohen, a 34-year-old real-estate agent from Tarzana who spent $50 to fill her 2002 Lincoln Navigator.

A summer recession. Just what John Kerry ordered.

[Rutles4Ever]

I agree. Between Saudi Arabia and Venezuela, there's enough ill will there to manufacture a price hike.

[azhenfud]

"Oddly, they never complain of paying $5 for a cup of coffee at Starbucks."

I can brew my own pot of caffeine for less than the $5.

[biblewonk]

Cool! I love expensive gas.

[Rutles4Ever]

The problem isn't "value" -- it's the fact that now you will stop buying bottled water and patronizing Starbucks. In historical inflationary terms, the price of gas is not outrageous. The problem is, the "dirt cheap" gas prices of the '90s allowed us to shift our disposable income into other services which may not have seen the light of day if oil prices rose with inflation.

It's all interconnected. Oil runs the world economy.

[GraniteStateConservative]

That's the thing. It doesn't matter. All that matters is that if gas prices are as high as they are expected to climb, the wrong track number will shoot up and Bush will be booted out.

[Puppage]

I can brew my own pot of caffeine for less than the $5

As do most sane people.

[Rutles4Ever]

$5 for a gallon of milk in New Orleans?

$3.50 for a box of Cap'n Crunch at a discount grocer outside Chicago. That's up a dollar from the beginning of the year.

[GraniteStateConservative]

So the deficit can go even higher and my daughter can pay even more of her income to DC? Great idea. Gas taxes are already allocated for road projects. You can't just turn those projects off mid-way through.

[GraniteStateConservative]

INFLATION. It's a comin'.

[Gone_Postal]

f fuel rates stay at or near current levels, expect everything to cost about 10% more.

I agree this country's economy is fueled on cheap fuel
as gas prices rise so does every product that is sold in this country.

the cost of doing business

[Puppage]

if gas prices are as high as they are expected to climb, the wrong track number will shoot up and Bush will be booted out

So, you think the price of gas is the most important issue to voting Americans?

[Sender]

[GraniteStateConservative]

I think it is another way people will feel anxious about where Bush is leading us. It is all summed up in the wrong track number. I guarantee it will shoot up if we have $3 gasoline, or even much more than $2. Economic growth will hit a wall this summer. People will take less vacation and enjoy less leisure time and they'll be more antsy at work and more angry at Bush for not solving the problem.

[1Old Pro]

That's great if you live within five or six hours of the hotel. That's not great if you have a family of four, live in New York, and planned on driving to Disneyworld.

O.K., let's say it's 1200 miles to drive. You get 25 miles per gallon. Thus you use 48 gallons each way or 100 gallons round trip. Instead of paying $1.80 you're paying 2 bucks a gallon or 20 cents more on 100 gallons. That sounds like an additional 20 bucks.

Sheesh, let's look at this in perspective.

[Puppage]

Economic growth will hit a wall this summer

Says whom? What are you basing that on?

[Moby Grape]

Gas prices, cable rates, and other such matters ARE what drives the mushy middle vote, and therein lies the danger to Bush...Bush should be calling for a panel to look into the causes (although he knows the cause) for the sake of assuring the voting public that he is on top of this matter and want to help.

Yesterday, the Bush spokesperson said that Bush was very concerned about gas prices....that won't CUT it with the mushy middle voters.

[Puppage]

Bush should be calling for a panel to look into the causes (although he knows the cause) for the sake of assuring the voting public that he is on top of this matter and want to help.

Or, maybe release some ot the Strategic Oil Reserves in the false hope it'll bring gas prices down.....like Klinton did for Al Gore during his laughable campaign.<sarcasm

[uncbob]

You usually don't buy 20-30 cups of coffee at one time, do you?

No but if you drink 7 a week it is $35 when you could drink it at home for a hell of a lot less

[Moby Grape]

Of course, I know that releasing the oil reserves won't work, and would be a mistake....but, the POINT is that if Bush and the GOP just sit around and do nothing, this issue will kick them in the butt....the dems know how to POSE for pictures (although really doing nothing...but it creates the impression of doing something and gets them votes)

We live in an age of media...and elections are won and lost by IMPRESSIONS as much as reality.

[1Old Pro]

Or $30-40 for a one-ounce cartridge of printer ink.

Or 150 for a gram of coke, thousands for plastic surgery, 80,000 thousand for a car, 2 million for a boat.

[Joe Hadenuf]

Oddly, they never complain of paying $5 for a cup of coffee at Starbucks.

Huh?

What a weird response and lousy analogy. I generally put about 13 gallons a day in my vehicles. Do you drink and pay for 13 cups of coffee at Starbucks every day?

[azhenfud]

"So, you think the price of gas is the most important issue to voting Americans?"

As shortsighted as it may seem, people tend to vote on their perception of what's the most immediate personal cost to them. The increased cost of fuel increases goods and services across the board - those that don't or can't adjust accordingly are squeezed and November will be an outlet for venting their frustrations.

Bush had a slim edge in the 2000 election - and can lose that margin easily this year, if he's not already done so.

BTW, there are rumors arising that because Haliburton was "caught up on" and has to "reimburse" for their "overcharges", American gasoline prices would reflect the difference. There are Haliburton shareholders who are also oil company shareholders who also stand to gain from high fuel prices. Guess who? Be on the lookout that this becomes a topic, too.