Gas Prices Leap on Fears of Tight Supplies

Wholesale gasoline prices leaped Tuesday after a fire at a major Los Angeles-area oil refinery raised fears of tighter gasoline supplies as the summer driving season approaches.

A “coker” unit caught fire late Monday at the Tosco Corp. refinery in Carson, which has the capacity to produce about 5.5 million gallons of gasoline and other fuels a day.

Tosco said it is still assessing the damage to the unit, which takes products left over from the gasoline refining process and turns them into other industrial fuels.

Other units at the Carson refinery are still operating, though at a reduced level, Tosco said. Tosco’s Wilmington facility, which finishes the blending process for gasoline and other products, is operating normally, the company said.

Tosco emphasized that gasoline production has not been reduced.

Nonetheless, the price of regular-grade gasoline on the Los Angeles spot market jumped to $1.425 a gallon, up 7.5 cents from Monday before the fire. In San Francisco, the spot price rose to $1.37 a gallon, up 7 cents, according to Bloomberg News.

California’s super-clean gasoline, required by air-quality regulations, is produced primarily within the state, so whenever a refinery has a problem, supplies tighten and prices spike.

The rising wholesale prices will quickly be felt at the pump, but they reflect market speculation rather than actual supply problems, said Rob Schlichting, a spokesman for the California Energy Commission. A quick survey of refiners Tuesday showed that gasoline production within the state was running at close to full output of more than 42 million gallons a day, he said.

A wholesale price of $1.425 translates into a retail price of at least $1.915 after the addition of 49 cents in state and federal taxes, and that doesn’t include dealer markup, Schlichting said.

The average retail price of self-serve regular gasoline in California increased 3 cents to $1.828 a gallon on Monday, according to a weekly survey of gasoline stations conducted by the U.S. Energy Information Administration. That price falls just short of the California record, unadjusted for inflation, of $1.847 a gallon reported Sept. 11.

Shares of Tosco, based in Stamford, Conn., gained 75 cents to hit a 52-week closing high of $45.30 on the New York Stock Exchange. The stock has risen steadily since the announcement Feb. 4 of its intended acquisition by Phillips Petroleum Co.