BUSINESS WATCH:

Bill Graham never imagined he would buy a hybrid. The Costa Mesa resident has been planning in recent weeks to purchase a new car — and he likes a vehicle big enough to stretch out and pack things in.

With gas prices reaching record highs around Southern California, however, Graham has put a Toyota Prius Hybrid on his list of possibilities.

The compact car uses less gasoline than a typical model, and as the price per gallon inches farther and farther above $3, those saved dollars can add up.

“I’m a big guy,” Graham said Friday as he stopped at the Mobil station at Harbor Boulevard and Baker Street. “I like big cars just because of the comfort level. But times are just changing.”

The Automobile Club of Southern California announced Friday that gas prices around the region had soared to all-time record highs, a result of both the weakening value of the dollar and increased investments in wholesale gasoline.

The areas surrounding Los Angeles, Long Beach, San Diego, Santa Barbara, Riverside, San Bernardino and Bakersfield posted their highest prices ever last week, while Orange County’s average of $3.45 per gallon was only 3 cents behind its record from last May.

By Friday afternoon, the Orange County average had climbed to $3.47, according to Automobile Club spokeswoman Marie Montgomery.

“It’s still under the record, but who knows what will happen over the weekend?” she asked.

Part of the reason for the surge in prices, Montgomery said, was an increased trend of people investing in the wholesale gasoline industry. Gas prices tend to rise in the spring, she explained, and many investors seek to turn a profit by putting their money down beforehand.

“Gasoline can be a good investment because they’re essentially betting that the price will go up later,” Montgomery said.

Tom Smalley, the president of the Costa Mesa Conference and Visitor Bureau, noted that escalating gas prices can benefit others as well. When a road trip becomes more expensive, he said, a number of people opt to stay in town and visit the local attractions — including some they may have missed.

“A lot of folks don’t know the Ferris wheel that’s on Balboa Island, the Fun Zone,” Smalley said. “There’s so many little pockets we take for granted.”

Still, many residents don’t have the luxury to choose between a trip to Santa Barbara or a night at the local theater.

Billie Taylor, a retired homemaker who lives in Costa Mesa, recently cut her driving time overall to meet other expenses.

“I think people are going to have to make some tough choices, and sooner rather than later, because they have to figure out what’s important to them and what’s not important,” Taylor said.

“I think most young people haven’t reached that conclusion yet. People who have been around a while, they’ve been through a few things and they understand you can’t go in and blow your money everywhere. You have to have gasoline to get around.”

MICHAEL MILLER may be reached at (714) 966-4617 or at [email protected].