Wednesday, February 29, 2012
With gas prices jumping 60 cents in a month, San Diegans are looking for ways to cope and hoping for a reversal.
SAN DIEGO San Diego consumers are feeling a bit of sticker shock at local gasoline pumps. The AAA Fuel Gauge report says the average price for a gallon of gas is up a quarter in the past week, and more than 60 cents since last month. Gasoline in San Diego is now as expensive as anywhere in the nation.
Don Morrow of San Diego seemed just a bit surprised yesterday as he got the bill for filling up his Cadillac El Dorado. The total was $65.16; "And my tank wasn't even empty."
"No choice," he mumbled as he paid and left for a business meeting in Los Angeles.
Despite the high prices, consumers like San Diego State University student Colleen Moody kept pulling in to fill up at a Mission Valley gas station.
"It's killing me because I'm a college student so getting to work and back is torture enough, let alone paying $50 to fill up my tank," Moody said.
She's taking fewer trips, and reminding her roommates when it's their turn to drive. But not everyone is driving less.
Ray Aaron drives the shuttle van at a nearby car dealer. He is busier than ever.
"Instead of using their second car to get them back home or having someone picking them up, they prefer using us," Aaron said.
It's more work for him, Aaron noted, and it's costing the dealership extra money.
Milt Kellar used a cane as he walked around his Volvo station-wagon at the filling station. He's getting a new knee next week, but he said he'd rather have new political leaders. Kellar thinks political change "might" make a difference at the pump, but he also serves up a healthy dose of skepticism.
"I think gas is going to be up here and it'll stay up here. And if it's 10 dollars a gallon, we'll be paying 10 dollars a gallon," Kellar said. "Unfortunately, it only hurts the people who either are retired, which I am, or people who just can't afford it."
Kellar is already changing his routine. He's bunching errands together, for example, to save fuel.
Jeff Lenard works for the Washington, D.C.-based National Association of Convenience Stores. Eight percent of the nation's gas is sold at convenience stores. He said cash customers, those who buy $20 of gas at a time, are coming in more often. Other customers are hedging.
"If they think prices will be up, they'll fill up. If they may be going down tomorrow, they may just get enough to tide them over for a couple of days, and come back and hope for better prices tomorrow," Lenard said.
Industry officials say the reasons driving the price hikes are familiar. Tupper Hull works for the Western State's Petroleum Association in Houston. He said oil prices are up, so gas prices are up.
"What appears to be happening is very similar to what we saw happen at about the same time last year. There's a lot of uncertainty about what's taking place in the Middle East, particularly Iran, and that appears to be putting a lot of upward pressure on crude oil prices," Hull said.
He also blames refinery outages in California and the Pacific Northwest, and the switch from winter to summer fuel blends. That switch requires refineries to shut down to retool, restricting supply and driving prices higher.
The high gas prices are putting a pinch on the San Diego economy.
University of San Diego Economist Alan Gin says a 10-cent a gallon rise in gas prices, leeches $8 million to $10 million a month out of the local economy. Prices are up 60 cents in the last month. That's $50 million to $60 million that used to be spent on food, shelter, or clothing. He said high gas prices could interrupt a fledgling economic recovery.
"As gasoline prices go up, consumers see this on a regular basis, maybe every week, or even more often. And that has a dampening impact on consumer confidence," Gin said. "And as consumers start getting worried, they cut back on their spending which has a tendency to slow the economy."
Gin said the economy should be able to absorb the price bump, if it is a temporary situation. If prices stay high or keep rising, however, there will be economic fallout.