Calif. gas prices hit $4.67, another record

• Several factors blamed, including state's higher fuel standards, problems at refineries.
• State's gas average hits $4.668 a gallon
• Sens. Feinstein, Boxer call for investigations

SANTA ANA, Calif. — Feeling the pain of California's record gasoline prices, Maria Harrison pumped just enough fuel Monday afternoon to keep her taco truck running and open for business for the rest of the day.

The $40 she spent didn't even move her gauge to the half-full mark, and she's raised the price of her tacos and sodas by 50 cents, to $2 each, to try to get by in the face of soaring gas prices.

"It's not fair,'' she says, "because they (her customers) get paid the minimum money."

"What can you do?" she adds. "I have to raise my prices. Otherwise I'm not going to make any money.''

Millions of Californians like Harrison have been making adjustments to a dismaying jump in retail gasoline prices that have set records daily even as most of the country's fuel supplies and costs have been more stable — and lower.

Gov. Jerry Brown moved Sunday to try to stem the price spiral by ordering state regulators to allow cheaper, easier-to-produce "winter blend" gasoline to be sold in the state ahead of the normal Oct. 31 switch-over date.

The California Air Resources Board, which requires a cleaner blend in summer months to reduce air pollution, issued a statement.

"This action is necessary to address the extreme and unusual fuel supply circumstance," the statement said. It said the move was "necessary for the immediate preservation of the public peace, health and safety or general welfare."

Gas prices in California rose again overnight to set a record statewide average of $4.668 a gallon for regular, up more than 3 cents from Sunday's price, which was also a record, according to AAA's Daily Fuel Gauge Report. The price is 50 cents a gallon higher than one month ago and well beyond the $3.803 price per gallon of one year ago.

That compares with a national average of $3.818 per gallon for regular, AAA said.

In the car-dependent Los Angeles region, the average price was $4.703, higher than the statewide average.

At the Arco station here where Harrison bought her gas, regular was selling for $4.599. The station has a reputation for lower prices, and cars filled the station's lot waiting to get to a pump. Three other stations within a couple of blocks were selling regular for $4.79 and premium at $4.99.
"It is very difficult,'' said Rosa Rubalcava. "You have to find other ways of cutting back. It's hard on everybody.''
"It's terrible,'' said Jesus Velasco, who was filling his work vehicle, a Ford van pulling a trailer with steam cleaning and power-wash equipment.

He pumped $85 into the van, moving the needle to half full, and put another $45 worth into fuel tanks for his equipment, enough to half-fill the tanks and get him through the day's work.

While his employer's vehicle is fueled, Velasco is trying hard not to use his personal car.

"Now I take the bus'' to work, he said. "It's better. I save the car for my family.''

Some people have reacted with more extreme measures.

In Roseville, northeast of Sacramento, police said they are investigating the theft of 750 gallons of gasoline from pumps at a Shell station. Police Sgt. Jeff Kool said surveillance video showed two suspects defeated the station's meter controls and illegally pumped the gas into external tanks on the back of a pickup in early-morning hours over three days.

"With prices in the upper $4 a gallon, gasoline is obviously more valuable,'' Kool said. "It's a criminal opportunity.''

Oil industry analysts have blamed California's rise on a combination of factors, including the state's gasoline regulations, which set higher fuel standards than the federal government and other states use. The state's 14 refineries produce gasoline that meets the state's higher standards, but there have been unforeseen equipment problems forcing shutdowns at several refineries in the state, and fuel refined elsewhere often can't be shipped to California because it doesn't meet the higher standards, said Tupper Hull, spokesman for the Western States Petroleum Association, an industry trade group.

"Replacing lost production is more difficult here,'' Hull said. "It takes a little longer than it does in other parts of the country."

Some analysts also blame commodity traders for sending prices higher on the spot gasoline market, where many independent retailers buy their supplies, leaving them more vulnerable to price volatility than major brands that have their own refineries or lock in wholesale prices.

"Fear drove the prices incredibly high,'' said Tom Kloza, chief oil analyst with the Oil Price Information Service in New Jersey.

He said concerns that California's supplies could grow tight, based on refinery production problems and the seasonal blend change, sent prices soaring to unreasonable levels on the spot market.

Sen. Barbara Boxer, D-Calif., on Monday asked the U.S. Justice Department to investigate whether traders colluded to drive up the pump price of California gasoline. "We cannot allow market manipulation by those who would seek to profit off the pain of our families at the pump,'' she wrote to Attorney General Eric Holder.

The state's other Democratic senator, Dianne Feinstein, on Sunday called for the Federal Trade Commission to investigate whether California's fuel prices were being illegally manipulated by traders or others.

Kloza said he thinks the worst is already over on the wholesale market and that retail prices in California will fall soon. The state's move to permit the switch-over to the cheaper winter blend will help, he said. He predicted the statewide average price could fall back to about $3.80 a gallon at the pump within days or weeks.

"It'll provide a little bit of relief, and together with the demand destruction that comes with $4.79 (a gallon) prices, I think we're going to get through this,'' Kloza said.

"Give it a few days,'' he said. "These gas-apocalypse highs ... I think those are history.''