$4.00 gas? | SierraSun.com

$4.00 gas?

As the price of oil continued marching toward $100 a barrel Wednesday and speculation continued about whether gasoline could reach $4 a gallon, area residents gassing up their cars said they haven’t yet changed their driving habits.

“I still am willing to pay the price to go and do what I do,” said Kathy Cassano as she filled up at Flyers Exxon on Plaza Drive in Grass Valley.

But she conceded she may cut back on her number of daily trips should gas hit the $4 mark.

Economists have speculated for much of this year that $4 gas could be on the horizon for consumers sometime next year.

Nationally, the price per gallon is $3.04, said Sean Comey, a spokesman with AAA of Northern California. The state average is $3.31, with Sacramento at $3.33 and San Francisco at $3.46 – the highest in the state.

Several factors, especially increased instability in the Middle East and also low supplies in the United States, have contributed to the latest price jumps in the state and nationwide, Comey said. Oil prices closed on Wednesday above $96 per barrel.

“As bad as it is now, it’s likely to get worse,” Comey said.

For the time, Flyers Exxon stations boast some of the lowest costs in western Nevada County, with $3.23 per gallon of regular unleaded gas at the East Main Street station in Grass Valley and $3.27 per gallon at the Glenbrook Basin station where Cassano filled up.

“I do what I have to,” said Gus De Valle of Nevada City, who filled up with $3.44 gas at the Nevada City Chevron. He said he does a lot of shopping in Roseville and visits relatives in San Francisco, but generally doesn’t go out much.

“A couple of years ago, it was Hurricane Katrina, and all the refineries (in the area) were down, and there was a shortage because of that,” De Valle said.

Now, the oil companies are keeping the prices artificially high, De Valle believes. “It really is infuriating.”

Nevada City’s Chevron has seen fewer customers in the past week despite the warmer weather, said station manager Barbara Fogarty. The half-cent city sales tax increase for transportation also added to the station’s higher prices, she said.

Typically, if the price per barrel of oil goes up $10, that means a 25-cent per gallon increase at the pumps, Comey said. Since the beginning of the year, oil prices have climbed more than $40 per barrel, which would translate to a $1 increase at the pump, he said.

But that price transfer hasn’t fully occurred, Comey noted.

Economists attribute part of the year’s price rises to several factors: Gulf Coast production that has never fully recovered after Hurricane Katrina; a predictable rise in automobile use heading into the year-end holidays; refineries that shut down in the fall for maintenance; severe weather in the North Sea and Gulf of Mexico; and declining national oil inventories.

In addition, the threat of war between Turkey and the Iraqi Kurds, and the Pakistani president’s recent suspension of the national constitution, could signal a wider conflict that would pose a threat for reliable flows of crude oil, Comey said.

Predicting when prices may level off is difficult because of the continuing uncertainty in the Middle East, Comey said.

In the meantime, more people reported making fewer trips of shorter distances to save money during typical high travel periods, Comey said.

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