Gas Prices Continue to Climb

Local gas prices continued to climb this week as oil companies experienced record profits.

While domestic demand for gas has been weak because of the recession, global demand is strong, and U.S. drivers are competing in a global market that has changed drastically in the last few years.

When gas prices reached record highs in 2008, Americans were driving more and driving gas-guzzlers, and intense American demand for oil was driving the global market, with vast quantities of oil being imported.

But the recession caused U.S. demand to plummet while South American nations, China and India have been continuously increasing their demand for gas. Now refineries in United States are producing less oil for the domestic market and exporting more to foreign nations, which drives up costs to consumers and profits for the oil companies.

“It’s a reversal of what we saw in 2008. In China, people are buying cars left and right, and it’s a full-steam-ahead kind of engine,” said Auto Club spokesperson Jeffrey Spring. “It’s a huge global market, and we’ve got to compete with the world for this product.”

On Thursday, Exxon Mobil reported an earnings increase of $4.4 billion in the first quarter of the year, while the cost of a gallon of gas in the Southland climbed to $4.25, prompting accusations of price gouging from consumer groups.

“Whenever they make huge profits and there is a significant climb in prices, it’s important to make sure everything is on the up and up,” added Spring.

But federal and state investigations over the years have never found evidence of price-fixing or collusion, said Spring. The bottom line is that the oil companies are in it to make a profit, and they experience both losses and profits over time, he said.

Gas prices in all Southland areas posted slight increases from the past week, with most area averages hovering between $4.20 and $4.25 a gallon, according to the Automobile Club of Southern California’s Weekend Gas Watch.

The average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $4.237 per gallon, which is 1.9 cents more than last week, and $1.12 higher than last year. In Orange County this week, the average cost of a gallon of regular gas is $4.216, up 1.4 cents from last week.

The stations currently selling the cheapest gas in the Palos Verdes area are listed below. Local prices are according to GasBuddy.com and reflect prices reported within the last 24 hours.

• Regular: $4.19
• Premium: $4.39

• Regular: $4.19 (Add 10¢ for credit/debit card)
• Premium: $4.39 (Add 10¢ for credit/debit card)

• Regular: $4.25 (Add 10¢ for credit card)
• Premium: $4.49 (Add 10¢ for credit card)