Another Record for State’s Gas Prices

California gasoline prices jumped almost 11 cents in the last week to a record statewide average of $2.223 a gallon, according to a government report released Monday.

The report came on the same day that a consumer group urged Gov. Arnold Schwarzenegger to declare a state of emergency and suspend the sale of mid-grade blends between regular and premium to help curb runaway pump prices. Motorists are reeling from 12 straight weeks of retail gasoline prices well above $2 a gallon.

The record average for the last week substantially exceeded California’s previous record average of $2.157, reached April 12, according to the weekly survey by the federal Energy Information Administration, an arm of the Energy Department. Nationwide, the average cost of gasoline climbed 9.7 cents to $1.941 for a gallon of regular -- also a record.

Fuel prices are being driven up by a variety of factors, including rising crude oil prices and traders’ worries that U.S. refineries won’t be able to make enough gasoline to keep up with demand during the summertime driving season.

For the first time in 13 years, the cost of crude oil touched $40 a barrel Friday before edging back slightly. On Monday, the price of benchmark grade oil for June delivery fell $1 to $38.93 a barrel on the New York Mercantile Exchange, aided by a call from the Saudi Arabian oil minister to curb world oil prices by increasing production from the Organization of the Petroleum Exporting Countries.

One market expert said the additional oil could help damp crude prices, but with gasoline demand outpacing expectations, retail prices may stay high. “I don’t see any solutions that are easy solutions for people to deal with this,� said Joanne Shore, senior oil market analyst and a California market expert at the federal EIA.

Diesel prices in California also hit a record average in the last week, jumping 8.2 cents to $2.356 a gallon. That was more than 61 cents above the nationwide average and 82 cents a gallon above the year-ago cost in California.

Independent truckers have staged protests in Los Angeles and the Bay Area to publicize the effect of high diesel prices on their livelihood.

Meanwhile, the head of Utility Consumers’ Action Network, a San Diego group that tracks gasoline prices, said the proposals he sent to Schwarzenegger on Monday weren’t new. But with gasoline costs continuing to soar and a new governor in charge, they deserve another look, said Michael Shames, executive director of UCAN.

“The impact of persistent, inflated gasoline prices upon the state’s economy is a serious matter,� Shames wrote to Schwarzenegger. “UCAN believes that actions must be taken by you, the attorney general and/or the Legislature in the coming months to reduce market dysfunction and perhaps reduce the likelihood of violent price swings this summer and next year.�

A spokeswoman for Schwarzenegger declined to comment on the letter, saying the governor’s staff hadn’t yet reviewed it.

Shames said the state should use its emergency powers to temporarily halt the sale of mid-grade gasoline, establish a corps of “refinery cops� to check up on the necessity of outages and require oil companies to disclose to the state the profit margins on its California refineries.

UCAN believes that storage tanks that normally hold mid-grade fuel at California gasoline stations and tanker terminals could be filled instead with regular gasoline, providing a cushion of the most popular grade of fuel for times when refinery production falters.

“Let’s take the storage that we already have in the ground, and use it so we can get through the summer,� Shames said.

Some in the industry question the group’s logic. “If you think it through ... how does that create more gasoline supply?� asked David Hackett, president of Stillwater Associates, an Irvine consulting firm that has conducted gasoline studies for the state. He called the proposal “a waste of time.�

The proposal for refinery cops is based on a program created to inspect electricity generators after post-energy crisis investigations showed some firms intentionally shut down energy units to hike prices.

Joe Sparano, president of the trade group Western States Petroleum Assn., said such oversight was unnecessary because numerous governmental agencies “have all performed rigorous investigations and found that there is no inventory, supply or production manipulation� among refiners.

As for oil company profits, Sparano cited first-quarter results that showed the industry-wide earnings growth was lower than U.S. industries as a whole.

“All this belies the notion that this is greed at the center of all this activity,� he said.