Gas prices drop in California, but stay steady in Merced

01/09/2013 5:21 PM

01/09/2013 11:31 PM

The new year is off to a strong start with gasoline prices tumbling in many metro parts of Northern California, according to AAA.

However, gas prices remained stagnant for Merced area residents.

The average price of regular gasoline in Merced was $3.55 per gallon Wednesday, which is about the same as last month's average, but up 4 cents from last week, AAA's Daily Fuel Gauge report said.

According to AAA, every metro area in Northern California saw a decrease of at least 2 cents over the past month.

Cynthia Harris, AAA senior spokeswoman, said there's less demand for gas in the winter months, and prices for crude oil are averaging under $100 per barrel. There was also no decrease in production.

"We started to see gas prices descend in December, and they should continue to stabilize in January," Harris said.

Harris noted that geopolitical tensions with Iran last year spiked prices at the pumps almost 65 cents at the beginning of 2012, but 2013 doesn't have the same challenges.

"We're getting a slight reprieve from the high gas prices we saw last year at this time," she said.

California's average price for a gallon of regular unleaded gas was $3.61 on Wednesday, down 2 cents from last month, and 8 cents from last year.

Among the 50 states, California has the fourth-highest state average price for regular, unleaded gasoline. Hawaii is the highest at $4.02.

Harris said the price of crude oil is slowly creeping up, and that will increase gas prices in California.

"We could start seeing a slow increase in gas prices over the next few months or so," she said.

By law, all state refineries are required to switch to a summer blend of gas by April, which contributes to an increase in prices.

"Summer blend is more expensive because of the additives added to prevent evaporation," said Harris.

Still, the Central Valley is home to the cheapest gas in Northern California.

The lowest average price in the region can be found in Modesto, where regular gas is $3.47 per gallon.

Reporter Ramona Giwargis can be reached at (209) 385-2477 or rgiwargis@mercedsunstar.com.

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