Record Gas Prices: Some Analysts Predict $3 A Gallon By Year's End

LA Daily News ^ | Mar 1, 2004 | Brent Hopkins

[hardhead]

Los Angeles gasoline prices hit a record $2.178 a gallon for regular on Monday -- up more than 50 cents since Jan. 1 -- and some analysts openly talked about it hitting the once-unthinkable mark of $3 a gallon, possibly by late this year.

The Automobile Club of Southern California reported that the price of gas soared 40 cents in the past month, putting it more than 22 cents above price a year ago and 1.1 cents higher than the previous high of $2.167 on March 21, 2003.

[Pepper's_Paw]

Why be upset. Back in '59 I paid 25 cents per gallon and only made $1.70 per hour. Using those figures with inflation paying $10 per gallon would not be out of line.

[from occupied ga]

This I doubt, but at least gasahol will now be a stabilizing product rather than one that drives up the price of transportation.

Not true. Since alcohol production always uses more fossil fuel (diesel) energy than you get back from the alcohol, then there will never be a price point where alcohol will cost less. see See Pimentel

[commonerX]

Don't get me wrong I don't think the high cost of gas is in some big plan or anything, but civil engineers have been trying to get the public out of their cars and onto public transportation for sometime. Some do feel that the government should force the issue, by making cars too expensive to drive.

[ken5050]

Yes..but..it's the idea...

[hardhead]

I read somewhere that ethanol production had the government subsidizing corn producers...and if it takes so much fossil fuel to produce ethanol, of what benefit is it?

[GraniteStateConservative]

Surprise! Your tax cut gets spent on high heating oil and gasoline prices!

[chuckwalla]

No it's a simple plan for high profits.

If they build decent transportation we will use it.

[Alberta's Child]

I don't think the high cost of gas is in some big plan or anything, but civil engineers have been trying to get the public out of their cars and onto public transportation for sometime.

You might even say that this civil engineer is part of that conspiracy. LOL!

Seriously -- the issue isn't really "auto vs. transit," but is simply a matter of a transportation system's efficiency. Believe me -- civil engineers would love nothing more than to pave this country from one end to the other. The practical reality of an inefficient transportation system is what is driving more and more decisions in this business.

[OneTimeLurker]

Because oil is dollar denominated, the Saudi's benefit is in porportion to the weak dollar. Thus they must charge more because they are paid in Yen and Euros for example.

[contessa machiaveli]

$2.07 for premium on long island, NY.

[WhiteGuy]

"I was told that GW Bush and his cronies went into Iraq to steal their oil, so he and his buddies could all get rich off of cheap fuel...."

No, the oil giants in the world oil production industry get rich(er)from expensive fuel...............

[CMAC51]

The problem is that oil co. profits soar. That is the reason for high prices. There is no unavoidable reason for high prices. If someone just picked your pocket would you say that crime is higher elsewhere so it's ok to steal mine?

That is the same old "lame" claim used any time the price of anything is high. If that were the case, you could simply invest in Oil stocks and more than make up the difference in cost to your own gas tank.

[Dead Dog]

I'm getting 21, not great, but not guzzling. Gas is cheap, life isn't.

[kellynla]

Lemonade from a lemon: Buy oil stocks and work from your home. :-) BTW Adjusting for inflation, we are paying less for fuel than we were twenty years ago.

[AreaMan]

California runs RFG (Reformulated Gasoline) which is not traded as widely as the other API "fungible" grades of gas are.

The reason that gas prices are so high in SoCal is because they can be. This is the biggest gasoline market in the world and the prices are being borne by the market because we have no choice. There are no viable transportation alternatives.

In the south bay of L.A. county there is an oil refinery that runs (almost exclusively) CHEAP California sour crude and has the refining capacity to flood all of SoCal with cheap gas. I know because I once worked for them and compiled the industry benchmarking study.

But why should they lower the price? If you are the downstream marketing manager for this company and you say, "I think we should lower the Tank Wagon (Dealer Tank Wagon) price by .90 cents to capture market share," you will be fired.

Here is why. According to the Petroleum Marketing Practices Act (PMPA) oil companies can only own a limited number of staions in a market. They are also prohibited from instructing the franchisees or N-Dealers on how to price their product.
So, even if you drop the dealer price there is no guarantee that they will follow with a price drop. You will lose margin and market share. You're fired.

Also, why mess with a good thing? Refining margins are great so let's make the most of it while it lasts. The public is powerless to affect change in the oil industry.

[LN2Campy]

still cheaper than pi$$ compared to the buck thirty a gallon I was paying 25 years ago when I first got my license and was only making $3.50 @ hour!

[RayChuang88]

Some do feel that the government should force the issue, by making cars too expensive to drive.

If that's the case the government would raise the price of gasoline to over US$4.50/gallon with more taxes and put excise taxes on automobiles based on the size of the car, the size of the engine and/or fuel economy results. Why do you think that the average car in Europe is somewhere between a Toyota Echo and Toyota Corolla in size and engine displacement?

[Joe Hadenuf]

But, but, but.... I was told that GW Bush and his cronies went into Iraq to steal their oil

Maybe we should have. Our guys are dying over there. If we need it, I'd take every drop of their stinking oil. Are we not spending multiple BILLIONS on rebuilding THEIR country?

[from occupied ga]

benefit is it?

it puts taxpayer money into the pockets of ethanol producers - the benefit is bought votes from all of the corn producers and the stockholders of Archer Daniels Midlands, Inc. The benefit to the public? No benefit at all to the public, in fact active detriment.

[Conspiracy Guy]

People will pay $1 for 20 oz of water in a bottle, then whine about $2 for 64 oz of refined gasoline.

CG