Gas prices, holiday getaway equal major headaches for motorists

LOS ANGELES -- Frustrated motorists coping with soaring gas prices that have dramatically increased over the past month can also expect more vehicles on the road this Labor Day weekend than last.

More than 33 million Americans will get out of town this weekend, up nearly 2 percent from last year, and the highest number since 1995, according to the American Automobile Association.

About 7 million of those drivers will be in the West, where seven states (California, Hawaii, Arizona, Nevada, Oregon, Washington and Alaska) have the highest retail gas prices in the nation, each averaging more than $1.84 a gallon, the AAA reported.

An informal survey of Carson City gas stations found prices for regular unleaded gas averaged $2.06 a gallon Wednesday.

The least expensive regular gas was $1.959 and the most expensive was $2.139.

According to Lisa Foster of the Automobile Association of America, Carson City's price was $1.75 a gallon at the last official survey Aug. 18.

Gas prices in Northern Nevada have shot up over the past two weeks, with the average breaking records in Reno, where they hit $2.13 for regular unleaded.

Prior to this week, the previous record was set on March 21 at $2.03.

"We've been saying prices have been going up since the first of August, but they really jumped after the middle of the month," Foster said.

High demand, issues with refineries and delivery have all combined to increase fuel prices in the days just preceding the Labor Day weekend.

Foster said an estimated 291,000 Nevadans will travel more than 45 miles from home during the holiday, slightly more than last year.

In California, the average retail price of gas reached $2.16 Wednesday, a cent lower than the all-time high set back in March. (When adjusted for inflation, however, prices are still lower than they were during the Iran hostage crisis.) Gas prices in Wyoming were the lowest in the West at $1.65.

Clogged freeways will only add to the agony of drivers, many of whom have endured a gas crunch over the past three weeks.

Gas prices rocketed upward because of a number of factors, including a ruptured pipeline in Arizona and temporary refinery shutdowns that limited supplies. Record demand for gasoline -- the highest ever four-week average, 9.4 million barrels, recorded by the federal Energy Information Administration -- also played a role. The result was rapid increases at the pump as evidenced in Phoenix where prices jumped more than 60 cents a gallon over a two-week period this month.

Industry experts say prices will drop, but not until the holiday is over.

"I think we are going to see prices go down the second week of September, it could go down a good 20 cents," said Claudia Chandler, assistant executive director of the California Energy Commission. "What is going to hold it up is demand. What people need to do now is shop around (for the best price)."

Typically, two factors account for gas price increases -- either spikes in the price of crude oil, which was mainly responsible for $2-plus prices at the pump in March in California, or manufacturing problems in a key part of the United States that helps raise the national average.

But a confluence of events in recent weeks has contributed to the price hikes, especially in California.

Not only were four refineries down, causing statewide production to drop by 10 percent, but extra gasoline usually kept in-state was shipped east to Arizona to help its crisis.

"Part of this is bad timing," said Doug MacIntyre, an EIA senior market analyst. "Also demand earlier this summer was lower than we expected because large portions of the country were wetter and cooler. One reasonable conclusion could be that people put off their vacations and are driving more now."

California drivers will be hard-pressed to find prices below $2 this week. Santa Barbara County had the highest price in the state -- $2.22, the AAA said. Some drivers are happy to get out of California, to states where gas prices are a little more reasonable.

"It's kinda crazy because you try to go on vacation and it costs so much," said Holly Pregler, 32, who was traveling with her husband to Lake Mead on Wednesday from their home in Oceanside, Calif. "Your major expense on a vacation shouldn't be on gasoline."

Her husband, Dean, was busy filling up their SUV, Yamaha WaveRunner and five 25-gallon containers with $1.95 unleaded gasoline at a southern Nevada gas station.

"It's less than we pay at home, not that I'm exactly happy about that," he said. "It's sad that we're excited that it's under $2."

Many drivers place the blame with major oil companies, two of which reported strong earnings last quarter. Exxon Mobil Corp., the world's largest oil company, boosted profits by 58 percent in the second quarter due to higher oil and gas prices. ChevronTexaco Corp. said its earnings nearly quadrupled during the same period.

"The price is outrageous," said Derek Levantian, 47, of San Bruno, Calif., as he filled up his BMW with premium gas in San Francisco. "The government should regulate it."

Ron Planting, an analyst for the American Petroleum Institute, rejected the idea that oil companies have purposely gouged consumers at the pump.

"Any time gas prices go up there are investigations," Planting said. "But state and federal governments have never found any price manipulation."

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Associated Press Writers Maria-Belan Moran and Christina Almeida contributed to this report.