Straight down the tank

California gasoline prices, already within pennies of last year's all-time record, are expected to soar to unprecedented heights -- $3.75 a gallon or more -- by Memorial Day.

In Santa Rosa, the average cost of a gallon of regular gas hit $3.40 on Wednesday, just four cents below the record $3.44 set last May.

A 10 percent increase is likely, experts say, as springtime arrives and motorists take to the road in warm weather, increasing fuel consumption.

"Good Lord," said Cathy Radelfinger, co-owner of Northwest Termite Control in Santa Rosa. Gasoline costs increased 5 percent last year for her business, which operates five trucks on service calls from Fort Bragg to San Jose.

The higher cost comes right off her bottom line, Radelfinger said. "If we raise our prices too much, people will just take their business someplace else."

The oil companies, she said, "keep making their big profits."

For the city of Santa Rosa, gasoline and diesel fuel costs doubled from $800,000 in 2003 to $1.6 million in 2006 and are expected to total $1.8 million this fiscal year.

Fuel costs for city vehicles in the 2008-09 fiscal year are projected at $2 million, said Bill Mushallo, city financial planning manager.

The U.S. Energy Information Administration expects the national average gasoline price to peak at about $3.40 a gallon this spring, and California prices typically run 20 cents to 40 cents higher than the nation's.

Experts say the high prices so early in the year are worrisome. Statewide, a gallon of regular gas cost an average of $3.39 on Wednesday, a dime below the state record set in May, according to the AAA Daily Fuel Gauge Report.

Nationwide, the $3.15 price Wednesday was 8 cents below the record, also set in May.

"We are starting from a price point significantly higher than last year," said Sean Comey of AAA of Northern California, calling it a "really troubling element."

Last year in California, gas surged from $2.66 a gallon in February to $3.48 in May, a 30 percent increase.

The switch to California's cleaner-burning summer blend of gasoline, already in the works, will add 10 cents to 15 cents to the cost of a gallon of gas, said Suzanne Garfield of the California Energy Commission.

Santa Rosa's average price was up 17 cents from a month ago, and up 59 cents, or 21 percent, from a year ago, according to the AAA.

The energy commission's analysts are a bit baffled by the high costs. "There doesn't seem to be a rhyme or reason why prices went up so much this year," Garfield said.

California refineries have reported no production problems, she said, with adequate inventories of crude oil and gasoline.

But the cost of that crude oil is a prime cause of high pump prices. The spot price for crude was $100.83 a barrel on Wednesday, up nearly 40 percent in the past year.

The price of crude accounts for $2.40 of the cost of a gallon of California gas, with taxes adding 64 cents, said Joe Sparano, president of the Western States Petroleum Association in Sacramento, an oil industry trade group.

Crude oil is a global commodity, its price pushed up by growing demand from China and India, as well as uncertainties over supplies from the Middle East and Latin America, Garfield and Sparano said.

"There is too much demand chasing too little supply," said Severin Borenstein, director of the University of California Energy Institute, in Berkeley.

And the source, he said, is not Asia. "The problem is us," Borenstein said, noting that Americans consume 12 times as much oil per capita as the Chinese.

You can reach Staff Writer Guy Kovner at 521-5457 or guy.kovner@pressdemocrat.com.