Crude Reality: at $3.29 San Diego Gas prices break an all-time record. Have they peaked?
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The retail cost of gasoline and the cost of oil continue to be disconnected
Today, San Diego gas prices reached a record-breaking high of $3.29 for April. In the history of California, gasoline has never cost this much, this early in the year, even after adjustments for inflation are made. Even more alarming is the fact that while gas cost 46¢ less on this day last year, oil was selling for $3.66 a barrel more.*
11 weeks of steady increases
In the last 11 weeks, gas prices have risen a total of 77¢ from $2.52 on January 22nd. The current average price is just 14¢ away from San Diego's all-time record high of $3.43 a gallon on May 11, 2006.
Have prices peaked?
Currently, it looks as though prices may be peaking ... for now. In the last week prices have crept up less than a penny. Unfortunately, we think its unlikely that prices will normalize or drop as quickly as they increased because the companies that control the supply of gasoline in California have too much market power. In fact, while we hope prices will go down, and expect them to decrease slightly over the next week or two, we think that that this may well be the eye of the storm.
While consumers may dread breaking San Diego's all-time high of $3.43 a gallon, Big Oil is looking forward to it.
And until we get politicians and regulators who are willing to do something about it, that's the crude reality.
Even if the price of crude continues to drop.
* On this day (April 6) of last year, San Diego regular unleaded cost 46¢ a gallon less than it does today (source: UCAN's www.fueltracker.com). Meanwhile, on this day in 2006, NYMEX oil cost $3.66 a barrel more the selling price today (source: Energy Information Agency).