Gas prices dip toward end of summer
Ryan Summerlin August 15, 2013
As the seasonal change of fuel criteria approaches, prices of regular unleaded gasoline in the South Shore are trickling downward.
Gas prices in California continue to follow a devaluing national trend. The costs throughout the state have dropped from an average of about $4.05 per gallon of regular unleaded gasoline in late June to about $3.89 as of Tuesday, according to GasBuddy.com petroleum analysts.
West Coast prices top the chart at about $3.75 per gallon of regular gasoline, whereas the Gulf Coast benefits from close proximity to gasoline refining and oil deposits.
In South Lake Tahoe, the average price was about $3.97 per gallon. Incline Village’s gas stations averaged about $4.20 per gallon of regular unleaded, as was Tahoe City’s average.
AAA reported Tuesday that Northern California gas prices had dipped 9 cents to an average of $3.86 in the past week.
Patrick DeHaan, petroleum analyst with GasBuddy, said prices have stayed fairly stable in the past few weeks.
“I don’t see a trend up or down in the near future,” DeHaan said. “Gas prices have fallen in some areas and in some areas have risen. We could have a trend develop any day.”
DeHaan said California gas prices are no longer far above the national average, but they still are some of the most expensive. DeHaan also alluded to issues at regional refineries last year, including the fire about this time last year at the Chevron, Inc. location in Richmond, Calif.
Mike Murphy, owner of Roadrunner Gas & Liquor in Meyers, said the summer was relatively quiet in terms of gas price fluctuation. He said there have to be much larger changes in the price for people to start noticing, and the annual gas tax rate also is evident in each year’s pricing strategies.
Nevada has a 16 cents-per-gallon state tax, and California has a 39.5 cents-per-gallon state tax.
In the Tahoe area, prices have been comparable to the state average but still are subject to the costs of distance to bring gasoline into the mountain area and the ripple effects from domestic production.
“Competition and location is key,” DeHaan said. “If you go over to Nevada where taxes are much lower, the gas is only $3.55. Individually, domestic production is exceeding the amount of oil that we had five or 10 years a lot of that thanks to (hydraulic fracturing) fracking.”
The introduction, and recent increase, of hydraulic fracturing, or “fracking,” has opened the gates for more than just petroleum extraction.
“New technologies have had an effect on oil prices, but it’s hard to make a direct conclusion (to price fluctuation),” he said. “It’s only anecdotal that we say that, but we don’t know to what degree.”
Different areas switch to the winter blend gasoline at different times around the state. Sept. 15 is slated as the national fuel standard change, but specific areas can have their own change date. South Lake Tahoe is scheduled to change about Oct. 30.
DeHaan said the reason for this is because of California’s push for better emissions in larger cities.
“(The summer blend) contains ingredients, and when they burn the gasoline emits fewer pollutants and doesn’t evaporate as quickly,” DeHaan said. “Summer gasoline simply substitutes winter blend with other blending components.”
Because of the different additives, the summer blend is typically more expensive.
Murphy said he sometimes has a rise in his prices when bringing the federally mandated winter gasoline.
“Winter blend does drive the price up a little when it first hits because everyone has to shut down, and then pipe (the winter blend) back up, so you usually see a little spike in October,” Murphy said. “We were $3.89 at the beginning of summer. Then we went up a little and back down, and we’ve been sitting at there ever since.”
Crude oil production in the United States has risen since last year, according to the U.S. Energy Information Administration. Four-week averages are up about 1.3 million more barrels from last year, from 6.29 million per day in August 2012 to about 7.5 million per day this August.
“Production of California gasoline is up 20 percent from last year,” DeHaan said. “The refinery stockpiles of California inventories are up 12 percent from last year. So supplies of gas are good.”
Domestic crude oil barrel prices have risen to about $105 per barrel, up roughly $1 from August 2012.
According to the California Energy Commission, California is a net importer of oil, as the state produces about 37 percent of the petroleum it uses.
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