PRICE HIKES AREN'T A GAS!

Byline: Brent Hopkins Staff Writer

After months of slow declines, gasoline prices are shooting back up in Los Angeles, with some stations seeing double-digit increases this week and experts predicting more to come.

With California's supplies already tight for the summer driving season, a sudden shortage in Arizona sent traders into a panic. The spot market shot up 20 cents in the past two days, to $1.37, while the Automobile Club of Southern California reported Tuesday that retail prices have crept up to $1.701.

``It hasn't jumped like this for a while,'' said Chuck Mercier, owner of a Union 76 in Burbank. ``It's been real stable, but my retail prices have gone up 17 cents in five days.''

A rupture of the Kinder Morgan Energy Partners' Tucson-to-Phoenix pipeline constrained supplies in Arizona, leading traders to speculate that California gas would be diverted to fill the shortage.

California refineries normally supply 70 percent of Arizona's gas, so any increase in demand would force prices up even further. With the line out of commission indefinitely, Kinder Morgan announced Tuesday that it would begin importing 85 percent of its gas from California.

``When a pipeline in Arizona can burst that's not even connected to California and can cause this much speculation, it shows how vulnerable we are,'' said Claudia Chandler, a spokeswoman for the California Energy Commission.

With no word on when the line will return to operation, wholesaler Bob van der Valk of Santa Fe Springs-based Cosby Oil projected an additional 10 cents in retail price increases by the end of the week. If the line reopens, he figures, the market will settle down, but until then, the uncertainty will keep prices volatile.

``We figured they'd come (down), but they won't unless the pipeline gets fixed and everyone's happy,'' van der Valk said. ``That's the unknown, so everyone's keeping their barrels and playing keep away.''

This has motorists gritting their teeth and reaching for their wallets. Mike Peck, a Burbank photographer, shrugged off the increase as he filled up his sedan at Mercier's station.

``Gas is gas - you've got to have it,'' Peck said. ``If it's a dime more a gallon, then that's still just two bucks more each time. It's never reasonable.''

As part of his campaign to avoid being recalled, Gov. Gray Davis made a stop in Los Angeles on Tuesday to lobby the Environmental Protection Agency to waive California's mandate to include the clean-air additive ethanol in gas. Both Davis and the Energy Commission say the clean-air goals set out by the EPA can be met without blending in ethanol, one of the components that make California's fuel some of the nation's most expensive.

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com

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SOURCE: Automobile Club of Southern California

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