SACRAMENTO, September 2, 1998 -- Drivers will get a treat at the gas pumps this Labor Day holiday weekend. Californians are paying significantly less for gasoline this year than they were for the last couple of years.
The statewide average price for August 31, 1998, was $1.148 per gallon for self-serve, regular unleaded. That compares to $1.40 per gallon in 1997 and $1.30 per gallon in 1996; a 25¢ and 15¢ a gallon difference, respectively.
One of the main reasons for low gasoline prices this summer is a glut of oil on the world market. This has kept crude oil prices at the lowest they have been in years, meaning a bonanza for motorists. California refineries are also producing at very high volumes and have not had any major down time or outages throughout the summer.
Prices have steadily fallen all summer. Starting at a high of $1.242 on May 25, prices have dropped an average of 2/3 of a cent each week for the last 14 weeks. And there is no indication that they have yet reached a bottom.
"Summer gasoline prices have not been typical these last few months," said California Energy Commission Chairman William Keese. "Normally prices increase during the summer months because of an increase in demand. It's the old theory of 'supply and demand.' The prices go up when we are on the road the most."
This year, regular gasoline started out at about $1.30 a gallon in January. In March, prices bottomed out statewide at $1.066, hitting a 28-year low when adjusting prices for inflation. One of the reasons was high reformulated gasoline inventories caused by refineries producing at higher volumes. Other factors contributing to lower oil prices were continued weakened Asian demand for petroleum products and milder winter weather in the northern hemisphere, which reduced the demand for heating oil.
Gasoline prices increased slightly through April and May 1998, hitting $1.242 on May 25. A main reason for the increase was the fact that a few oil refineries in Southern California were knocked off line by a power outage. Though it took only a few days to get the refineries fully operational, the price-increase at the pumps lasted nearly two months.
Though prices are low now and could drop even further, Chairman Keese warns against complacency when it comes to a single transportation fuel.
"There are always uncertainties in our transportation energy sector. That's why the state has advocated diversifying its energy system and supporting clean alternatives to gasoline and diesel such as natural gas, alcohol fuels and electric-powered vehicles," added Chairman Keese.
For more detailed information on gasoline prices, please visit the Energy Commission's Web Site at www.energy.ca.gov/fuels.html.
Return to What's New!