Could high oil prices mean $4 a gallon gas?

UCAN In the Media

<><><>Editor's Note: Today's gas price in San Diego is $2.88 a gallon. Yet, when you compare
the current cost of oil ($1.83 a gallon) to the cost of oil in San Diego this summer when
gas prices broke the all-time record high of $3.50 a gallon, the price of gasoline should
be closer to $4 a gallon.

<><><>
Click here to read the commentary that prompted this report on Fox 6 News.

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Utility Consumers' Action Network
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If the market was working, gas would be about $4 a gallon. That's the word, not from the oil industry, but from a consumer group.

The Utility Consumers' Action Network in San Diego says oil prices have jumped to their highest level in history, passing $78 a barrel. Yet, the price of gas at the pump is relatively low, with the average in San Diego around $2.88 a gallon.

The reason, says UCAN, is refiners are keeping the price down to keep themselves from being noticed by Congress while it is debating a new energy bill.

gas price increase graphic from Fox 6 San Diego News

"The reason gas prices are lower right now with oil prices at high levels is because the oil companies don't want to draw attention to our complete dependence on foreign oil and the failure of our national energy policy," argued Charles Langley from UCAN.

UCAN says new laws, now up for a vote in the Senate, would require the use of more renewable fuels and take away tax breaks from big oil.

The consumer group says after the bill's fate is determined, expect gas prices to skyrocket.

Western States Petroleum, which represents the oil industry, did not return a call seeking comment.

Labor Day Price Drops

Gas prices continued to fall at the holiday. Energy experts were surprised because prices usually climb right around Labor Day.

According to UCAN, The Utility Consumers, Action Network, the average price for a gallon of regular unleaded in San Diego County at the time was $2.76.

That's 74 cents lower than the record $3.50 a gallon reached in May.

Even though lots of Californians take road trips on Labor Day weekend, gas prices remained stable.

Consumers we spoke with were relieved but still cautious.

"Every time there's a driving holiday or anything like that they always gouge the prices up which I think is really unfair," said Marvin Stanford.

Some say political pressure is driving down prices. While energy experts say California refineries finally increased production after maintenance setbacks this past spring.

We've also had four consecutive quarters of decreased demand for gas.

Fight Back

Consumer watchdog group UCAN says you can help to lower gas prices in the short term by complaining to your state legislators. Locate Your Legislators

The group's spokesperson Charles Langley says, "When the heat is on, gas prices drop, but it has to be the heat that is going on the politicians."

Langley says for gas prices to stay lower over the long term our federal legislators will have to get involved in developing a new energy policy.

Saving With Summer Gas Prices Saving With Summer Gas Prices 6/22/07
Summertime demand usually sends gas prices soaring, but does the weather also play a part? Charles Langley from the consumer watchdog group UCAN sits down with Angela to offer tips on how consumers can save money.

Gas Prices Gas Prices 5/03/07
Gas in San Diego County is at another record high, .11 more than just a week ago. Charles Langley, UCAN, talks with us about the reasons behind the hike.

For a free 28-page booklet containing 127 gas-saving tips from UCAN and former Road & Track writer Chet Cunningham, click here.

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