Oil prices are going down. The spot market price for gasoline is down. Your gas prices are going up.

Here's why:

Demand for gasoline in California has tanked every year for the last six years, yet prices continue to rise, even as oil prices drop. In 2008, for example, oil was selling for $147 a barrel, and California gasoline reached a record high of $4.62 a gallon. And last October, when gas prices in California surged to an average of $4.72 a gallon - the new record high - the same oil was selling for $89 a barrel.

Today, (2-28-13) we predict that gasoline prices should begin to decline on average in San Diego County through Monday from six to twelve cents a gallon.

Gas prices have gone up almost 8¢ since the 14th ... a heart breaking price hike that makes this the most expensive February on record for gasoline in California history.  The current average is now $4.27.

Local gas prices surged 9¢ at the retail level today, reaching an average price of $4.09 a gallon in San Diego County.

Prices have increased 27¢ in the last 7 days, and almost 40¢ in the last two weeks, representing an 11% increase in less than 14 days.

Given the velocity of the current price trajectory, and the fact that it is occurring this early in the year, suggests that 2013 will probably be the most expensive year for gasoline in the history of the state of California.

UCAN's gas project at www.fueltracker.com reports that gas prices in San Diego have surged 18¢ in four days. We predicted this surge on Friday, HERE, and HERE.

A new analysis by UCAN, the Utility Consumers' Action Network shows that San Diego and California gas prices have exceeded the record high for any January in U.S. history.

"This could be the beginning of a possible superspike in gas prices," says UCAN's Gasoline Project manager, Charles Langley.

Gasoline currently averages $3.90 a gallon in San Diego -- The highest price ever for this time of year.

San Diego gas prices increased 3.3¢ a gallon since Monday, matching the rate of increase we saw during the entire month of December in 2012.

We predict that gas prices could climb as much as 5.5¢ a gallon by Monday, despite reports of  healthy inventories of gasoline on the West Coast, and relatively stable oil prices.

On Monday morning, the market barely seemed to have a pulse. The three factors came into play:

On Thursday we predicted that gas prices would fall
another 8¢ by today (see last blog). 

Today, our look at wholesale prices shows that despite 
significant volatility on the wholesale level, gas prices will
continue to decline in Southern California. 

We predict that prices will drop on average by 4 to 10¢
a gallon by the time we make our next prediction on Thursday.

Why Hurricane Sandy will help lower our gas prices

We've said it before: "Driving rain drives down gas prices."

And when a hurricane is in play, you can expect gas prices
to drop in the short term.  In fact, we predict that in Southern
California, gas prices are likely to drop another 8¢ this weekend.

The primary reason is demand destruction: On the East
Coast, demand is down because so many roads are
impassable.