Once again, California motorists are forking over $4 a gallon for gas and they may have to dig for 10 to 15 cents more as prices continue to rise through the rest of the spring and into summer.
The state hit an average of $4 per gallon Monday, the first time since September, with the usual factors in play -- increased driving as winter recedes, higher crude prices, conversion to the more expensive summer fuel blend and refineries reducing output for maintenance.
But there's an additional reason -- the price of ethanol, which makes up about 10 percent of the content of gasoline nationwide. Ethanol has risen past the price of conventional gas for the first time in more than two years as rail networks across the country slowed shipments because of problems associated with a brutal winter freeze and the need to use trains for crude, said GasBuddy.com senior petroleum analyst Patrick DeHaan.
"The tracks are just too congested," he said. "Crude oil shipments are through the roof. Our tough winter hasn't helped."
Ethanol values have been over $3 a gallon for much of the United States, while spot prices for gas remain around $2.70 before taxes. Since the federal government requires ethanol to be blended into conventional gasoline, the result is the cost of ethanol is pushing retail gas prices higher.
While prices have risen across the U.S. for the past several weeks, California's average -- as usual -- is considerably more than the $3.56 mark nationwide. California prices have gone up 35 cents in less than two months.
The AAA says the national average could reach $3.75 a gallon. California gas is usually 30 to 40 cents higher.
"I kind of expected higher prices to return," said Jan Alderson of Palo Alto. "Though if they're $4 now, what will they be by summer? Even higher? Yikes."
Added Steve Gospe of Sunnyvale, noting the $6-plus cost of gas overseas: "It could be worse. I'd hate to live in the Netherlands."
Big price spikes this time of year are common. Last year, the national average jumped 49 cents from Jan. 1 to Feb. 27, peaking at $3.79. In 2012, pump prices surged 66 cents from the same date to a peak of $3.94 on April 5. In 2011, prices soared 91 cents to a peak of $3.98 on May 5.
The state's all-time single-day high is $4.67 a gallon, set on Oct. 9, 2012.
The recent climb has not outraged California drivers the way some earlier hikes did. It's spring, prices jump and what are you going to do about it?
"I think motorists have been used to it. Although they hate it, it's no longer shocking," DeHaan said. "However, the pain won't be as severe as it has been the last few years, so there is light at the end of the tunnel."
The long-range forecast is also encouraging. Energy officials say increased domestic oil production and growing sales of cars that get 40 miles per gallon will help keep prices stable in the U.S.
In fact, the U.S. is likely to surpass Saudi Arabia and Russia as the world's top oil producer and move closer to energy independence in the next 20 years, according to the International Energy Agency.
Prices may be higher, but at least the gas lines of the 1970s aren't likely.
Contact Gary Richards at 408-920-5335.