In an unusual twist, news of higher gas prices started this week in Los Angeles. Generally, our prices top LA’s first. On Saturday, the Los Angeles Times reported that prices had reach nearly $4.00 a gallon just in time for President’s Day. Later in the week, the $4.00 gallon reached the Eastern Sierra.
The LA Times and other sources point to the higher price of oil and the shutdown of some California refineries for maintenance as what caused the price hike. Analysts see the $5.00 gallon of gas shortly ahead. The Auto Club was quoted as saying the $5.00 gallon may turn up in some places in April or May.
In the Eastern Sierra, as of Tuesday, a gallon of unleaded in Mammoth Lakes sold for $4.36 to $4.39. In the Owens Valley, prices ranged from $3.80 on the low end up to $4.15. In the typically pricey neighborhood of Bridgeport, a gallon of unleaded sold for $4.89.
Various sources say that the price of oil is mostly to blame. About.com said the the price of oil impacts 55% of gas prices. The Los Angeles Times wrote that oil makes up 80% of the price of gasoline. CNN’s Fareed Zakaria has reported that oil producing companies raise the price of oil to balance their growing budgets. Others say fears of military action against Iran impact oil prices. So do commodities traders who buy and sell futures contracts, which are agreements to buy or sell oil at a specific price on a specific date. By bidding up oil prices, traders can actually create higher prices.
And, there is typically a greater demand for gasoline in the Spring and Summer. It all points to the pocket book of the consumer.