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Gas Prices Up in Record Numbers in California, Relief Expected Next Week

Travelers Today       By    Katie McFadden

Updated: Oct 06, 2012 07:52 AM EDT

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A gas station uses upside-down number 2's as 5's to display prices of gasoline, which has jumped over five dollars a gallon, in Carlsbad, California.(Photo : Reuters)

Gas prices are up in California and some have even reached record highs.  The price of gas in the state has increased by an average of 32 cents since last week and it is expected to increase even further within the next few days.

California's highest average gas price record is $4.61 a gallon, but that could be shattered  at any time in the next week. In some areas, gas stations are charging over $5 a gallon, putting California above Hawaii as the state with the highest fuel cost. With the surge, California's average gas price was $4.49 by Friday, the highest average in the country, according to the Associated Press.

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Some gas stations have even closed due to the high prices. The AP mentions a woman named Rebecca Olson, 43, who drove from Irvine to a Costco in Tustin in hopes of finding lower prices, but the station was closed. 

Olson and her husband have large gas guzzling cars and they already spend over  $500 a month on gas due to long commutes. They had to stop driving one care and are considering selling another one to buy something more fuel efficient.

"Just last night, we were looking at economical cars, we were car shopping," she told AP.

Gasbuddy.com's analyst Patrick DeHaan believes the increase will continue for another few days, but relief will be sight by next week. According to AP, he thinking the average price will reach a high between $4.60 and $4.85 and will then start to come down.

"It may take a few days for stations to start lowering their prices because they aren't yet buying the cheaper gasoline," Patrick DeHaan told Mercury News. He believes prices will come down again by an average of 35 cents.

"Hang in there, Californians," he said. "Relief is coming by mid-next week. But for now, virtually the entire state has already, or is about to, set all-time record high prices."

As prices at the pump shock Californians, many are wondering what made this surge occur. According to analysts, it is a series of refinery and transmission problems. California has strict pollution limits that require a special blend of cleaner-burning gas from April to October, according to AP.

The gas inventory shortage is compounded by the state's strict pollution limits, which require a special blend of cleaner-burning gas during summer months.

"We use the phrase 'the perfect storm,' and you know what, this current one makes those other perfect storms look like a drizzle. I don't want to scare anyone, but this is a big problem," Denton Cinquegrana, executive editor of the Oil Price Information Service told AP. "Run-outs are happening left and right."

The California Independent Oil Marketers Association, which represents independent gas station owners, filed a waiver, requesting permission to sell the winter gas before usual Oct. 31 switch date, according to Mercury News. The California Air Resources Board is reviewing the waiver, but they must determine if there is a real gas shortage and the effects the change could have on air quality. By the time the waiver is approved and the new gas ships, the surge would be over.

Gas stations operators are feeling the effects. Rotten Robbie stations were selling gas for $4.59 a gallon, which matches the 2008 average record.

"Not a good record," Rotten Robbie's boss, Tom Robinson told Mercury News. "Customers unhappy. Certainly understandable."

Drivers are trying to find the cheapest gas stations around. Many are finding the cheapest prices at Costco's such as the one on Automation Parkway in San Jose, which is charging $4.29 a gallon. The price was only $4.09 on Friday morning, but then saw a 20 cent increase. Yet lines of about 50 cars at a time are still surrounding the stations as gas stations down the block are charging $4.58 a gallon, according to Mercury News.

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