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Gasoline prices drop in state as demand weakens

From Times Staff and Wire Reports

California drivers got a price break of 6.4 cents for a gallon of gas on average during the last week, a federal report showed, as demand slipped and oil prices eased.

The California average price for self-serve regular gasoline fell to $3.226 a gallon Monday, which was 69 cents higher than a year earlier, according to the Energy Department’s weekly survey of gasoline stations released Tuesday, a day late because of the Martin Luther King holiday.

The average U.S. pump price for regular gasoline fell 5.1 cents to $3.017 a gallon in the week ended Monday, the government said. The price was 85.2 cents a gallon higher than a year earlier.

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Lower pump prices partly reflect cheaper crude oil, whose price has fallen on fears a slowing economy will cut demand.

“Obviously, any time an economy slows, production processes slow, inputs slow and so there’s less [energy] resource utilization,” Assistant Energy Secretary Alexander Karsner said. “If the economy slows down, some places are going to use less energy,” said former CIA Director James Woolsey, speaking at the same event.

Crude oil fell as low as $86.11 a barrel Tuesday at the New York Mercantile Exchange, the lowest since Dec. 6 and down almost 14% from its record high of $100.09 a barrel Jan. 3. Crude settled at $89.85 a barrel, down 72 cents.

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In addition, demand for gasoline fell 2% to 9.12 million barrels a day in the week ended Jan. 11, according to Energy Department data.

In the Energy Department survey, gasoline cost the most on the West Coast, where it dropped 5.9 cents to $3.155 a gallon.

Among major cities, San Francisco again had the highest gasoline price at $3.326, down 6.9 cents.

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The Gulf Coast states had the lowest price by region, at $2.904 a gallon, down 5.3 cents.

Diesel fuel fell 9.9 cents to $3.36 a gallon in California and dropped 5.6 cents to $3.27 a gallon nationwide, according to the report, based on a survey of about 800 filling stations.

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