California sways gas prices in West

COEUR d'ALENE - The price of gasoline has already risen 43 cents a gallon since Friday in California, and experts say Idahoans could see higher prices soon.

California's average price today is $3.86, more than a dollar a gallon higher than the U.S. average price of $2.78. Idaho's average price was $3.05 on Wednesday, which is seventh-highest in the country, according to the American Automobile Association.

The national average for gasoline is up slightly from a week ago, but is at the lowest level for this date in nearly five years. Month-over-month prices are down in 33 states, and distribution issues in other parts of the country are under control with states like Indiana down 26 cents a gallon, and Michigan down 13 cents while Ohio decreased by 10 cents.

Higher pump prices in the West, including Idaho, could be poised for another increase if regional markets respond as they did following the Feb. 18 fire and explosion at the ExxonMobil refinery in Torrance, Calif.

A map of the U.S., provided by AAA, shows the influence of regional factors in the retail pricing of gasoline. The refinery shutdown in February constricted regional supplies, resulting in immediately higher prices in California and on the West Coast.

Within about three weeks of that event, Idaho pump prices shot up 39 cents a gallon to $2.34. Since that time, Idaho's prices have risen at a more modest rate; nevertheless the state's average price broke the $3-a-gallon barrier by July 2, AAA said in a press release.

Californians are once again weathering sharp increases in gas prices due to reports of tightening supply in the state. The rapid run-up in that state's fuel prices has drawn the attention of the California Energy Commission, which is now investigating the fundamentals behind this most recent spike.

Early reports indicate that despite refineries exceeding last year's production rates, higher-than-expected demand for gasoline has resulted in significant drawdowns in the supply and distribution systems which are unable to keep pace, the release said.

"Will California's current supply issues affect Idaho?" asked Dave Carlson, director of public and government affairs for AAA Idaho. "It's a valid question, given the fact that fuel intended for the Idaho market was diverted elsewhere earlier this year, which led to higher Idaho pump prices.

"Call it a ripple effect or simply how markets respond when gasoline intended for one marketplace is diverted to another," Carlson said.

Gasoline refined in Salt Lake City may again be sent to other destinations, including Las Vegas, to fill shortage gaps, he added. Part of the problem is that suppliers operate in "just-in-time" gasoline inventories, according to the AAA release.

Supply is delivered only as demand requires - which limits storage costs, but can lead to significant spikes in price when supply and demand are imbalanced.

The regional gasoline supply issues are occurring at a time when there is a glut of inexpensive oil in the marketplace. The West Texas Intermediate market closed at $53.04 Tuesday, compared to $100 a year ago.

High pump prices dominate the western U.S. landscape. Here's a look at the most expensive states to buy fuel: California, $3.86; Alaska, $3.48; Hawaii, $3.34; Nevada, $3.28; Washington, $3.20, Oregon, $3.15; Idaho, $3.05.

Other impacts include Idaho's recent 7-cent-a-gallon increase in the state's gas tax, which went into effect July 1.