Refinery problems and a pipeline closure have suddenly sent gasoline prices soaring in California, even as they fall in most of the country.
The average price for a gallon of regular gas in California jumped 5 cents overnight to hit $4.23 Wednesday, according to a daily survey from the AAA motor club. Never before have prices been so high at this time of year.
“We’re going to see a pretty pronounced spike in prices,” said Denton Cinquegrana, senior editor for West Coast fuel markets at the Oil Price Information Service. California’s record – a statewide average of $4.61 per gallon, set in June 2008 – could be in jeopardy, he said.
“I don’t think it’s out of the question,” Cinquegrana said. “The system is very short on gasoline right now.”
San Francisco’s average hit $4.33 per gallon Wednesday, while San Jose’s reached $4.28.
The price spike began Monday after two unconnected events struck refineries in both Northern and Southern California.
An electricity outage hit the Exxon Mobil Corp. refinery in Torrance (Los Angeles County) Monday morning, shutting down some of the plant’s units and slowing others. The facility typically makes about 10 percent of California’s gasoline.
More than 100 miles to the north, a Chevron Corp. pipeline that brings crude oil from Kern County to three Bay Area refineries closed the same day after the company found elevated levels of chloride in the line. The Kettleman-Los Medanos pipeline is one of three carrying crude from the southern San Joaquin Valley to the East Bay.
Had either problem occurred while the rest of the state’s refineries were running at full capacity, the impact on prices would have been minor. But some plants are undergoing planned maintenance. And Chevron’s Richmond refinery, one of the West Coast’s largest, has been running at reduced capacity ever since a major fire damaged its crude unit Aug. 6.
As a result, supplies of finished, California-grade gasoline at the state’s refineries were 9 percent lower last week than they were at the same time last year, according to data from the California Energy Commission.
“The backdrop is, we’ve had a not-fully-functioning slate of refineries since Aug. 6,” said Gordon Schremp, senior analyst with the Energy Commission. “It all came to this.”
Monday’s problems caused an immediate surge in prices on the wholesale spot market, with gasoline jumping 20 cents per gallon on Monday alone in the Bay Area. By midday Wednesday, the spot price topped $3.95 per gallon, up 51 cents this week. Retail prices quickly responded, rising Tuesday and Wednesday.
“It takes several days for the spike to show up at the gas pump, but then it rises pretty quickly,” said AAA spokeswoman Cynthia Harris.
Not everyone is convinced the current price increase will last long.
Power has been restored to the Torrance refinery, and Exxon Mobil is in the process of returning the facility to normal production. A spokesman for the company said Wednesday that the refinery would be able to fulfill all of its supply contracts. In addition, demand for gasoline usually falls after Labor Day, with the end of summer vacation season. And oil prices are dropping.
“All of those factors should restrain an increase in gas prices,” Harris said. “Basically, this is a temporary trend. But it’s hard to know when it will go down.”
David R. Baker is a San Francisco Chronicle staff writer. E-mail: firstname.lastname@example.org