San Diegans are paying the most at $2.35 per gallon By Adrienne Bischoff, Contributor For the past year, gas prices in San Diego have been rising. According to the Energy Information Administration’s Web site, www.eia.doe.gov, in 2003 the price of crude oil averaged $28.50 per barrel. Crude oil accounts for about 44 percent of the cost of one gallon of regular grade gasoline. In 2003, the average cost for a gallon of gas in California was $1.85. Last Thursday, crude oil prices were $53 per barrel. According to the Utility Consumer’s Action Network Web site, www.ucan.org, on Oct. 11 the average price for gasoline in California was $2.39 per gallon, much higher than the average national price of $1.93 per gallon. Possible explanations for the price increase include world events like a proposed strike by Nigerian oil workers, production cuts in Russia and the damage of Hurricane Ivan to the Gulf of Mexico’s oil fields, according to an Oct. 11 Associated Press article. On Oct. 5, the price of 87-grade gasoline at the ARCO station on the corner of Montezuma Road and College Avenue was $2.23 per gallon. The week before it was $2.09. ARCO station manager Eddy Shaya said the reason for the spike is there aren’t enough supplies. “Gas prices go up and they go down,” he said. “It depends on the gas coming in from other countries.” Shaya said he has not received any complaints about the price hikes and some students have said price isn’t a major consideration for them either. “I don’t pay attention to gas prices,” San Diego State business administration student Megan O’Neil said. “I go wherever’s closest.” Some consumer advocates and independent gas station owners suggest events such as hurricanes and work strikes are just convenient excuses for oil refineries to raise gas prices. Charles Langley, gasoline analyst for UCAN, described his interpretation of the price increase. “The real problem with California is that the refining cartel can manipulate and control the retail price of gasoline,” Langley said. “Hurricane Ivan can be a convenient excuse or a legitimate excuse. “It’s in the industry’s best interest to have shortages. They make more money by selling less gas. The Shell Oil Refinery in Bakersfield is the most profitable refinery in California and they are shutting it down because they want to create shortages. This is a dysfunctional market; the refining operation that delivers the least makes the most money. This is the root of our problem.” According to Langley, San Diegans are bearing the brunt of these duplicitous tactics. “San Diegans pay the highest gas prices and the highest energy prices in the nation,” Langley said. “Students are going to have to budget for gas between $2.50 and $3.00 per gallon. We’re in for a rough time.” A separate AP article released Oct. 11 stated “the most expensive gasoline was sold in San Diego, where self-serve regular was $2.35 a gallon.” Independent gas station owners, like David Hallak of Emerald Oil in La Mesa, are as vulnerable to price hikes as consumers because they have to buy their gas supply from companies such as Shell or ARCO. “We get hit the hardest,” Hallak said. “We work with the market. For the last two weeks, I haven’t been making a profit. I’m losing two cents per gallon as we speak. I don’t know how long I can go on.” Hallak also suspects recent world events are just excuses for oil companies to raise prices. “They’re saying supply and demand, besides Nigeria with the rebels trying to affect the oil market in that country,” Hallak said. “I think that’s major news for the oil companies to raise their prices.” Psychology student Janell Jerfita, who will have to budget her gas money, chooses to patronize Emerald Oil even though she lives closer to another gas station. “It’s cheaper than most other gas stations,” she said. “There is one station closer to my house, but I come here.” Jerfita, who drives a Ford Explorer, has a strategy to reduce her gasoline expenditures. “I usually spend most of my gas driving to places besides work and school,” Jerfita said. “I’ll just try to drive less. I’ll have to cut back on driving to places that are farther away.”