Regular gas cracks the $3 barrier

The $3 barrier has been broken.

Thursday, the price for one gallon of regular gasoline was $3.01

at the Chevron station at the corner of Jamboree and San Joaquin

Hills roads. The price for premium fuel was $3.21.

Ray Barnett, who lives in Mission Viejo, stopped at the Chevron

station Thursday morning. He paid more than $42 to put about 13

gallons of premium gasoline into his Acura TL.

“I was running on fumes, that’s the only reason I stopped here,”

Barnett said.

The Chevron station wasn’t the only place in Newport-Mesa where

prices for regular gasoline topped $3. According to

o7www.f7o7orangecountygasprices.comf7, the Shell station near

Irvine Avenue and Westcliff Drive was charging $3.07 for a gallon of

regular. The price at the Chevron station near Bristol Street and

Irvine Avenue was $3.05.

Throughout Newport-Mesa, prices at gas stations that had yet to

crack the $3 mark appeared to be on the verge of doing so. Signs

advertising prices above $2.90 were a common sight Thursday.

Faced with rising wholesale prices, gas stations have no choice

but to charge drivers more, said Gordon Jones, a manager at the

Chevron station at Jamboree and San Joaquin Hills roads. Though he

did not have exact figures on how much his station has to pay for

wholesale gas, he said wholesale prices went up 8 cents per gallon

Wednesday. On Monday, there was a 2-cent hike. That was preceded by a

6-cent increase Friday.

Jones drives a Ford F-150, and prices have hit his wallet too. He

said a fill-up costs him about $65.

“I’m actually thinking we’re going to have to carpool, me and my

wife. It’s tough to survive if you don’t,” Jones said.

In California, disruption to the oil industry caused by Hurricane

Katrina is only one reason prices are so high, said Rob Schlichting,

spokesman for the California Energy Commission.

Other factors affecting prices are in-state refinery problems and

the high demand for fuel over Labor Day weekend. Schlichting said the

state typically imports 10% of the gasoline burned by California

cars. Because of the disaster along the Gulf Coast, however, some of

that fuel has been diverted to other markets.

Increased crude oil prices from Katrina’s devastation have also

pushed up gas prices, he said.

Thursday, a barrel of light, sweet crude oil scheduled for October

delivery fetched $69.36 on the New York Mercantile Exchange.

How high can prices go?

“Anybody who makes a prediction about where gasoline is going to

go is making it up,” Automobile Club of Southern California spokesman

Paul Gonzales said.

Generally, Gonzales said, the outlook for local drivers is bad. If

oil facilities in the Gulf Coast remain offline for weeks, high

prices could persist for a long time.

Though no one wants to pay $3 for a gallon of gasoline, UC Irvine

professor Richard McKenzie said current gas prices, when adjusted for

inflation, are only 50% higher than 1950 prices.

Aside from the immediate impact of Katrina, McKenzie sees the

expansion of foreign economies, such as China and India -- which

leads to increased demand for fuel -- as a factor that keeps pump

prices high.

“It probably is somewhat amazing the prices aren’t higher than

three bucks,” McKenzie said.

* ANDREW EDWARDS covers business and the environment. He can be

reached at (714) 966-4624 or [email protected].