California’s gas prices drop again
August 19, 2004
It’s something of an economic anomaly, but it’s also a welcome respite for California drivers squeezed by high gas prices.California gas prices declined for the second straight month, even as the cost of crude oil rocketed to record levels.The average price for a regular gallon of gas in California stands at $2.09, a decrease of 14 cents from July 13, according to AAA data. Truckee’s average is $2.18 per gallon. Even with the drop, the state’s prices are 20 cents higher than they were a year ago.”This is welcome relief for consumers, but there are still some troubling market forces at work right now,” said AAA spokesman Sean Comey in a press release. “Extremely high crude oil prices are looming on the horizon.”The expense of crude oil has not affected pump prices because California refineries have lowered their profit margin, said the California Energy Commission. University of Berkeley analysts say the lure of potential profits by selling gas in California has increased supply from state refineries. But the rising cost of oil raises the possibility that gas prices will begin leveling off, or even spike back up, as the market adjusts to the higher oil rates.Crude oil values have doubled since early 2002, before the war in Iraq began, according to the AAA. The national average gas price is $1.86, 23 cents cheaper than California’s average.