Gas prices draining people’s wallets |

Gas prices draining people’s wallets

In line with most California cities but out of step with the nation, South Lake Tahoe gasoline prices have increased in the last month by 14 cents, raising questions about how fuel prices affect tourism.

The going price for a gallon of self-serve unleaded at South Shore is $1.81, 18 cents higher than the statewide average. The U.S. average is $1.46.

Only two California cities have higher prices than the basin’s — Eureka and San Francisco.

Before blaming the filling stations, it’s important for consumers to know the pump price increases are not coming from the stations but from the wholesale market, said Atle Erlingsson, spokesman for AAA Northern California.

AAA issued a report that shows an average industry profit of 5 cents a gallon among stations across the state. The going standard is traditionally triple that amount, Erlingsson stated.

The remoteness of Tahoe is often cited as a reason for locally high gas prices.

At a time when prices usually decrease, California refineries have cut production, therefore leading to demand outpacing supply.

According to the Energy Information Administration — a division of the U.S. Department of Energy — gasoline stocks on the West Coast have slid 9 percent since mid-October, while demand for fuel has gone up by that much.

“We call this a bump in the road,” Erlingsson said, adding that prices should level off by winter. “For the most part, we wouldn’t expect any increases.”

But there are other factors that could change things dramatically.

“The big wild card in future prices is the situation in the Middle East,” Erlingsson said. “If military tensions escalate, that could certainly put an increased premium on crude oil, which would boost prices at the retail level.”

The United States may know more on Friday, as Iraq has been given a deadline to allow in weapons inspectors.

As a possible war in the Middle East looms, there’s a growing sense among transportation officials that gasoline prices could spike to levels unseen for a quarter century — when lines and fist fights at gas stations were the order of the day.

Lake Tahoe Visitors Authority Executive Director Bill Chernock agrees there’s a correlation between gas prices and the feeder markets that lake tourism relies on.

Where that threshold falls depends on what motorists are willing to pay and that remains a mystery.

“I think it takes a major jump in gas prices to make a significant dent in the drive-up market,” Chernock said, adding a 20-cent increase apparently fails to constitute a major jump.

In addition, the rise in a barrel of crude affects the flying public. Airfares also go up.

“People who are incredibly price sensitive will see a jump there, too,” Chernock said.

Susan Wood can be reached at (530) 542-8009 or via e-mail at

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