State Motorists Get Another Jolt at Gas Pumps
Gasoline prices gave California consumers another jolt Friday, jumping as much as a dime a gallon on fear that the state’s rash of troubles with its oil refineries will sharply reduce supplies just as demand is picking up.
The price of regular unleaded, which could recently be found for $1 a gallon in Southern California, reached $1.50 and higher, and some independent gasoline marketers reported difficulty obtaining supplies.
“Holy mackerel! A buck thirty-seven,” exclaimed retiree Richard Catena, 72, filling up his 1990 Ford Ranger at a Shell station in Orange County. “That is ridiculous.”
Analysts expect prices to remain high for at least a few weeks, and they warned that gasoline might not return for the foreseeable future to the unusually low levels enjoyed this winter. Gas prices had been slowly increasing in the last month leading to Friday’s spurt.
“Gasoline is definitely going a lot higher” in the wake of the explosion and fire Thursday at the Chevron Corp. refinery in the San Francisco Bay Area, said Michael Mayer, an oil industry analyst with the Schroder Wertheim investment firm in Burlingame.
The Chevron accident follows problems at three other refineries, including a fatal explosion and fire at the Tosco Corp. operation in Northern California a month ago.
Traders are betting that the high prices in California will lure gasoline by ship from the U.S. Gulf Coast and elsewhere, reducing a glut that has kept gasoline prices low in the rest of the country.
California’s gasoline prices can seesaw widely because the state is not connected by pipeline to other gasoline-producing areas. Moreover, the cleaner-burning gas required here to meet strict air quality regulations is not produced by many refineries outside California.
The recent increase in prices comes after a nearly 18-month fuel price holiday. Oversupply and lower demand have left the world awash in cheap oil; both oil and gasoline prices hit historic lows in December. But world crude oil prices had begun to rise well before the California refinery problems occurred, so gasoline prices had a running start when trouble hit.
Such explanations were of little comfort to consumers who have been socked with the gas version of sticker shock since prices began rising a month ago. Friday’s sudden run-up only added to the pain.
If gasoline prices climb 20 cents a gallon, a motorist with a mid-size car getting an average of 20 miles per gallon and driving 15,000 miles a year would pay an extra $150 per year to run his or her car.
Realtor John Hevy, 35, said he didn’t even notice the price at a Shell service station in Orange County until he was nearly finished filling up his 1999 Toyota Camry, which drinks about $33 in gas a week.
“I was, like, wow! The price on premium was $1.57,” the Costa Mesa resident said. “If I could pump it back out, I’d do it.”
Inside the Chatsworth Chevron station and mini-mart, manager Adel Rafila said he is listening to a barrage of complaints from customers over “crazy prices.”
Gasoline expert Trilby Lundberg said spot checks Friday in Southern California found unleaded regular self-service gasoline retailing for as little as $1.18 and as much as $1.51 a gallon.
As of March 19, unleaded regular was selling for an average of $1.18 in the Southland, up 3 cents in two weeks, according to the Camarillo-based Lundberg Survey’s most recent sampling of 800 service stations in Los Angeles, Orange, Riverside and San Bernardino counties.
Since then, wholesale prices have soared, Lundberg said. California dealers saw wholesale prices jump 34.08 cents to sell at $1.02, “which is what retail used to be,” Lundberg said. Branded gasoline rose 15.53 cents, to 85.68 cents.
Those prices do not include federal, state and local taxes or the gas station owners’ profit margins.
Chevron continued to mop up Friday after the previous day’s explosion and fire at its refinery in Richmond, which is operating, but at reduced capacity. The company said it doesn’t yet know the extent of the damage but expects to be able to supply its customers.
The accident came a month after an explosion and fire at the Tosco refinery in nearby Martinez, which killed four people and resulted in the closure of that facility pending an investigation.
Two other refineries--Arco’s in Los Angeles and Exxon’s in Benicia--have experienced problems that have disrupted the supply of gasoline to the huge and volatile California market.
The California Energy Commission calculates that the state’s refineries as a group are producing 8% to 10% less than normal because of the outages, said Claudia Chandler, assistant executive director.
“That means supplies are tight,” she said. “This is putting upward pressure on prices . . . and they’re probably not going to go back down to the levels that we saw.”
But she said shiploads of the cleaner-burning gasoline required in California are on the way and should begin arriving this weekend.
Some independent gasoline marketers and retailers are having trouble locating gas to sell, said Jay McKeeman, executive vice president of the California Independent Oil Marketers Assn., a Sacramento trade group.
“There are definitely pinches in the supply,” McKeeman said. “There are places where there are outages of unbranded products.”
Although unhappy about rising prices, many motorists said Friday that they would not alter their driving plans.
“I don’t like it, but I take it in stride,” said Melinda Nagle, 42, a Santa Ana data entry clerk whose 1996 Toyota Camry costs her about $20 a week in gas. “I try not to stress over things I can’t change.”
Times staff writers Leslie Earnest and Martha Willman contributed to this story.
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Prices at the Pump
After dropping in February, retail gasoline prices in California are jumping.
Premium: $1.44
Midgrade: $1.33
Regular: $1.23
Source: U.S. Department of Energy
