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Gas prices: It's supply and demand

A driver pays for a purchase at a gas station in Crescent City in the shadow of signs announcing that days gas prices. Del Norte County Supervisor Chuck Blackburn hopes state and federal officials will take a close look at gas pricing. (The Daily Triplicate /Stephen Merrill Corley).
A driver pays for a purchase at a gas station in Crescent City in the shadow of signs announcing that days gas prices. Del Norte County Supervisor Chuck Blackburn hopes state and federal officials will take a close look at gas pricing. (The Daily Triplicate /Stephen Merrill Corley).

By Fred Obee

Triplicate editor

On the warpath against high gas prices, Supervisor Chuck Blackburn renewed his call yesterday for citizen action and government intervention.

The oil industry is pretty much having its own way, Blackburn charged. These prices are driving people out of this county.

California gasoline prices are the highest in the country. Even Hawaii residents pay a few cents less.

Blackburn said his analysis shows that the difference between Oregon and California gas prices is nearly 40 cents a gallon, even after considering the state taxes, transportation costs and the additional burden of blending California gas with additives to promote cleaner burning.

To me, thats a big figure, Blackburn said.

The reasons for the differences in gas prices are plentiful, Blackburn said, but mainly it is a question of consumer demand and who is controlling the supply.

Companies like Humboldt Petroleum which runs local Shell and Gas 4 Less stations blame high prices on environmental regulations and taxes and say supply is too low.

At the same time Humboldt Petroleums vice president, Jim Siler, said market forces and lack of competition in some areas shoot prices higher.

The prices in Richmond and Concord where the refineries are still have high prices, because there are very few stations competing for customers, Siler said.

For Crescent City it works the opposite way. Because of its proximity to Brookings lower gas prices ($1.69 per gallon), Siler said that kind of competition keeps Crescent Citys price 12 cents lower than it would be otherwise.

Local gas is trucked here from Eureka, yet Eurekas prices are $2.13 per gallon.

Blackburn said he believed Californias gasoline suppliers are at least part of the problem. In the last decade, independent suppliers have been squeezed out of the market by big oil companies, reducing the competitive forces that drive gas prices lower.

Weve got to get back to a more competitive market, Blackburn said.

He also pointed to a Congressional investigation of how Alaskan crude oil was shipped to Asia, leaving the West Coast in short supply.

He urged people to contact state and federal legislators to let them know high gas prices are hurting California communities.

 


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