Reports of record low inventories have given California refineries a green light for high-octane price hikes.
Consumers who delay buying gas today will pay more for it tomorrow.
Gas prices in California are set to surge over the next few days. Since Monday, low fuel supplies have driven up the wholesale cost of gasoline by an estimated average of 31¢ a gallon for independently owned gasoline stations and almost 20¢ a gallon on average for brand-name dealers.
"We expect gas prices to skyrocket," says Charles Langley, a gasoline analyst at UCAN, the Utility Consumers Action Network, "On Thursday, we predicted gas prices would increase by at least a nickel by Monday. It turns out that this estimate was too conservative. Gas prices have already surged by 4¢ overnight, and more price hikes are in the pipeline."
Ironically, U.S. oil futures on the New York Mercantile Exchange (NYMEX or Merc) have plunged from $110 a barrel in April to below $100 a barrel today. And he price of Brent Crude, the World's benchmark oil price, has dropped to $112 a barrel today, down from $120 a barrel in April. "On an oil-per-gallon per gallon basis, that should represent a decrease of almost 20¢ on the cost of the oil that goes into a gallon of gasoline," says Langley.
Contact Charles Langley at UCAN.org for more information, or click here for more commentary on why gas prices are climbing in San Diego.