Gas prices on the rise again

By Caitilin McAdoo, Bay City News Service

July 12, 2006

Gas prices have been inching up again after dropping slightly at the end of June, bringing the statewide average cost for a gallon of unleaded gasoline back to $3.26, according to a report from AAA Northern California.

Although the average price of gasoline has gone up eight cents in the past two weeks, it is the same price as it was by the end of the last reporting period in June, according to AAA.

The Bay Area average for a gallon of regular unleaded is currently $3.26.

The most expensive place to fill up a tank in Northern California is in South Lake Tahoe, where regular unleaded is $3.40 per gallon.

Pleasanton and Vallejo both had the lowest average price among Northern California communities, according to AAA. AAA of Northern California spokesman Sean Comey said that the price of gasoline in California has not dropped below $3 a gallon in nearly three months and gas continues to be twice as expensive as it was four years ago.

Despite a relatively abundant supply of gasoline in California, the statewide average price is 29 cents above the national average of $2.97.

The rise in gas prices has not, however, kept motorists off the road. In fact, according to data from the U.S. Energy Information Administration, gasoline consumption has continued to rise, AAA reported.

AAA has attributed the hike in gas prices to a number of factors, including the economics of supply and demand, instability in oil producing regions of the world, the threat of hurricanes on oil and gas production facilities, the low value of the dollar relative to other currencies, the high cost of the fuel additive ethanol, and speculative investment in petroleum-based commodities. Most of these factors are expected to continue to effect fuel prices for some time, AAA reported.

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