Get ready for another long, hot summer of big truck inventories

Mark Rechtin is Los Angeles bureau chief for Automotive News.

CALIFORNIA SEEN

Mark Rechtin | Automotive News / February 26, 2007 - 12:12 pm

The desert hamlet of Taft gets no respect. Think Dust Bowl-era Oklahoma, add a few diners and drugstores, and you get the idea. Taft also lies hard against the notorious San Andreas Fault. And if that weren't bad enough, the town originally was called Moron.

But Taft's 6,400 citizens don't mind the wisecracking from passersby because they sit atop more dead dinosaurs than anyone can count.

Taft is home to America's biggest oil strike, the Lakeview Gusher. Though Lakeview has long since tapped out, surrounding Kern County still accounts for 10 percent of U.S. oil production. A string of refining facilities is in nearby Bakersfield.

If there were any place in America to buy cheap gasoline, you could safely assume Taft would be it. And you would be dead wrong.

On Feb. 20, I drove through Taft, and gasoline was anything but cheap. While some parts of the American Midwest sell gasoline near the dainty $2-a-gallon mark, the Taft Shell station offered regular unleaded at $2.63. Premium was $2.85.

Cheap is relative. Many parts of Los Angeles are quickly ratcheting toward $3 a gallon, even though the Port of Los Angeles is home to refineries that process 500,000 barrels of oil daily. Explain that logistical logic.

California sets the tone for national trends, and gasoline prices are no different. The tourist season's gasoline price increases are still months away. Yet if California gasoline costs three bucks in February, summer looks to be painful indeed.

So the next time some automaker's sales analyst spins a yarn about the long, hot summer of 2006 being a one-time occurrence -- and that his company's large truck and SUV sales are poised for a rebound -- take a pass on that particular brand of snake oil.

Cheap gasoline is gone, folks. There was a downward fluctuation last fall, perhaps not coincidentally timed around Election Day. But nationwide, January and February gasoline prices were right back at all-time highs for the month, according to the Energy Information Administration.

Electioneering and OPEC shenanigans aside, the price trend for gasoline is still going up. That likely means consumer desire for big trucks and SUVs is going to keep going down. You can be a Moron and still see that one coming.