Gas Prices Hit New Record Sunday

Panic-buying among retailers and a drop in wholesale supplies are to blame.

By Sharon Bernstein
|  Monday, Oct 8, 2012  |  Updated 6:19 AM PDT
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Gas prices jumped 12 cents overnight across Southern California from Friday to Saturday. More increases are expected over the next few days. Janet Kwak reports for the NBC4 News at 4 p.m. on Saturday, Oct. 6, 2012.

Janet Kwak, Rodney Danson

Gas prices jumped 12 cents overnight across Southern California from Friday to Saturday. More increases are expected over the next few days. Janet Kwak reports for the NBC4 News at 4 p.m. on Saturday, Oct. 6, 2012.

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The spike in fuel prices in California has more buyers interested in fuel efficient cars, including hybrids and electric vehicles. Ted Chen reports for the NBC4 News at 4 p.m. on Oct. 6, 2012.

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Gas prices hit record highs again on Sunday across the state.

The price of a gallon of regular clocked in at $4.65, according to the Automobile Club's daily fuel price report.

A run on supplies at the wholesale level prompted a massive spike in prices at the pump that has plagued consumers for the past week.

Last week, the price of a gallon of gasoline spiked as high as $5.79  thanks to a dramatic increase in the wholesale cost of fuel and panic-buying among gas station owners.

Fuel was also harder to find at many locations in Southern California, as some mom-and-pop retailers decided to sit out the price hikes and just shut down. Others looked for gasoline to sell, but couldn't find it.

Jeffrey Spring, an analyst for the Automobile Club of Southern California, said a number of factors have caused prices to rise so high and so fast.

First, he said, wholesalers deliberately let their supplies of the special summer formulation of gas required by California state law for use in the warmer months, because they expected an influx of the less-expensive fuel used in the fall and winter.

But then, a power outage at a major refinery and fears of contamination in a Kern County pipeline drove supplies down further. To make matters worse, a Northern California refinery struck by fire earlier this year is still not back up to capacity, Spring said.

“Concerns in the wholesale market caused retailers to panic a couple of days ago,” he said last week.

Many purchased supplies quickly and pushed prices way up.

The impact at the pump was immediate.

“It’s the biggest spike we’ve seen all year,” Spring said.

The Auto Club is expecting the price hikes to be “severe, but short-lived,” Spring said.

The organization has an online service that helps consumers find the least expensive gasoline in their area. Here is a link to that page.

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