MARIN COUNTY, Calif. - Yes, gas prices have skyrocketed in the last month and most consumers feel helpless but to pay it. Why? The recovering economy has spiked demand and gas prices at a time the oil and refinery industries have been slow to respond.
In San Francisco, where gas prices are usually the highest in the state, as is southern Marin, $4.95 to $5.09 a gallon of regular is common.
A few independents were slightly cheaper but not by much. Cheaper gas is available.
On Highway 101 at Strawberry in Marin, the Arco, $4.29 a gallon. One exit down the road, gas is 70 to 80 cents a gallon more. "We have had a real strong rebound in oil demand worldwide and supply hasn't caught up yet," said Severin Borenstein, an energy economist at UC Berkeley's Haas School of Business who also said skyrocketing crude oil prices may stem from lack of workers returning to drill rigs.
"For every one dollar in the price of crude oil per barrel, leads to about a 2 and a half cent increase in the price of gasoline at the pump. In fact, I don't think we've seen the full increase come through yet to the pump," said Professor Borenstein.
It is a stunning change since last April when oil got to negative $37 a barrel, meaning those with oil to sell had to pay the buyer to haul it away. Today, oil costs about $84 a barrel and could, conceivable go to $100. "It could, I don't think it's gonna happen," said Borenstein.
Statewide, California's average gas price on Wednesday was $4.56 a gallon for regular. A week before , it was 4 cents lower. A month ago, it was 16 cents lower and get this $1.37 cheaper a year ago.
California gasoline reached its all-time high of $4.67 a gallon in October of 2012. But, adjusted for inflation, it would have to go to $5.58 a gallon to have the same economic impact.
"I think it's unlikely that gas prices in California are going to get over $5 a gallon. But, I wouldn't rule it out. Even it we do see a spike up into the fives, it won't last," said the professor.
What baffles energy investigators is why the gap spread between California gas prices and other states is so wide and inexplicable by normal economic analyses.