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Experts try to make sense of rising gas prices

February 23, 2012 12:00:00 AM PST
As the prices at the pump continue to climb, it's easy to find frustration. But what about an explanation?

"Basics, it's supply and demand, and unfortunately that means rising prices," said Jeffery Nugent, a professor of economics at USC.

Nugent said there simply aren't enough refineries producing gasoline in the U.S.

"There are some refineries that are closing down, and it seems that it's not a very profitable business," he said.

As a result, Nugent said gas will only get more expensive as we head into summer.

"I think if we get another couple of blows here and there, or where ever it is, in the Middle East or elsewhere, we could be at $5," he said.

"It's crazy out there; everything is well over $4 a gallon now. It's gonna be very hard for drivers to find a 'bargain price' there is none to be had," said Auto Club of Southern California spokeswoman Marie Montgomery.

Montgomery said it's possible that prices will stabilize, even if current trends seem to indicate otherwise.

"We may have another year like last year where we sort of went up, but then we stayed there all year," she said.

Drivers are coping with another jump in prices overnight. As of today, the average price for a gallon of regular unleaded in Los Angeles, Orange County and Ventura County is $4.19, up 44 cents from a month ago and one of the largest overnight price increases in Los Angeles. Meanwhile, it's $4.14 in the Inland Empire.

"We know that it's already impacted people even before this spike, so you have to assume that as the prices get higher, there's gonna be greater and greater cutbacks," Montgomery said.

Analysts say for every $50 spent at the pump, roughly $31 goes to the oil companies and only about $1 in profits actually goes to the gas stations.

Meanwhile, the president confronted Americans' anxiety over rising gasoline prices during a speech at the University of Miami on Thursday.

"You know there are no quick-fixes to this problem. We can't just drill our way to lower gas prices," Obama said.

Seeking to draw a contrast with Republican presidential hopefuls, Obama says the focus on drilling is just "a strategy to get politicians through an election," possibly alluding to Newt Gingrich and Rick Santorum.

During his speech, Obama said says simply calling for more drilling is just a "bumper sticker," not a real plan for bringing down rising gas prices.Obama says his administration's "all-of-the-above strategy," which includes oil, gas, wind and solar power, is the "only real solution" to the nation's energy challenges.

But in an exclusive Eyewitness News poll, 45 percent of viewers surveyed blame oil companies rather than the president for skyrocketing prices.

Yet others in North Hollywood aren't sure who to point the finger at.

"I'm not sure who to blame, I'm so confused. I don't really get politically involved with this kind of stuff, but there's someone to blame," said Melanie Maseredjian.

President Obama is doing what he can to keep the blame away from him.

"There is no silver bullet, there never has been," he said Thursday.

But this only means that everyone will just have to bite the bullet with gas prices for the time being.