California repeatedly warned about spiking gas prices, fragile supply. But fixes never came, and prices have steadily risen. What gives?
California has become a national example of the danger to motorists from surging gasoline prices.
In January, the Los Angeles Times reported on a survey that found an overwhelming majority of Californians — 95 percent — expect to pay more for gasoline starting in May. In the past, only a few years after the fuel crisis began to appear, Californians used such fears as evidence that gasoline prices would soon spiral out of control.
Last year’s average of $2.88 per gallon, set in 1971, had topped $4 per gallon at the end of last month, despite the nation as a whole.
Since then, prices have edged down slightly. But on Friday, they reached a new national high of almost $3.25, according to the Energy Information Administration, a government agency. The record high came as gasoline prices fell around the country, and as demand was weak.
Economists attribute the high prices mostly to supply and demand. The nation’s growing demand for gasoline has meant that refineries have struggled to find the fuel in time, and that gasoline-consuming nations’ inventories have shrunk.
The problem has gotten worse this summer, when demand in the U.S. and elsewhere remains low. In July and August, U.S. stockpiles fell by 4.9 million barrels, the biggest one-month drop in almost 40 years.
At the same time, gasoline consumption in the United States is expected to drop to 4.8 million barrels a day from 4.9 million in September, according to the EIA. Oil-by-the-hose — oil that flows out through a hose rather than being pumped in through a pipe — fell by 2.5%. In many places where gasoline is rationed, like parts of Iraq and Libya, the scarcity has caused people to stop buying gasoline.