Gas prices return to $3+ a gallon, and will likely climb higher, soon.

Editor's Note: For more commentary on the Chilean gas shortage, and the Second Law of Gougeonomics, visit my blog at UCAN's gas project at www.fueltracker.com.

For the first time in four weeks, gas prices have jumped above $3 a gallon.  Our insiders say that the reason is the earthquake in Chile. Two of Chile's biggest refineries are out of commission. Chile buys refined fuel from California anyway, but now demand for gasoline is higher as refineries are exporting to Chile.

What's important to know is that the current price jump would have happened even if there was no earthquake in Chile.

If you watch UCAN's gas forecast by Consumer Bob on NBC 7/39, every Monday and Thursday at 4:15 PM, then you know we've been predicting a major price spike for the last ten days or so, and that the current spike had little to do with the earthquake in Santiago.

Here's why we think prices are set to climb further:

Since February 15, the spot market price* for raw gasoline in Los Angeles has jumped at least 25 cents, yet the street price of gasoline has only increased by a nickel, on average. San Diego's street prices rices have fluctuated between $2.90 and $3.00 a gallon since the first of  February.

As a result, unbranded stations that buy spot gasoline tend to keep the market competitive, but when tere is a shortage of spot gasoline, these stations are unable to buy cheaper gas. This means less competition for the major brands, which result ins higher prices on the street in San Diego.

As of yesterday, the avrage spot price for gasoline was the same as the average wholesale price for brand-name dealers. if this parity continues, prices will go up. In addition, if the spot price climbs above the average wholesale price charged to dealers, then we'll know for sure that high-octane price hikes are in the pipeline.

For more information, contact Charles Langley, UCAN's Gasoline Project manager, or visit our Cheap Gas Locator at www.fueltracker.com

* The spot market is surplus gasoline that is sold to unbranded gas stations. Typically, spot gas costs ten to 20 cents less than the same gasoline sold to brand name retailers.