Gasoline Prices Up After Pipeline Rupture

California drivers are spending an average of 4 cents more a gallon for regular gasoline than they were a week ago, largely because of problems with a fuel pipeline in Arizona, energy officials said Monday.

The average California price of self-serve regular gasoline rose for the first time in seven weeks, to $1.743 a gallon, according to a weekly survey of service stations conducted by the Energy Information Administration, the research arm of the U.S. Energy Department. A week ago, the average price was $1.703. Even with the increase, the latest average remained well below this year’s peak of $2.145 a gallon, recorded in mid-March.

Nationwide, the average retail price took its biggest weekly jump since February, increasing 3.5 cents to $1.571 a gallon. The average has risen in five of the last six weeks, a trend the EIA blamed on higher oil prices and low inventories.

California gasoline prices appear to be reacting to a recent rupture in a pipeline operated by Kinder Morgan Energy Partners that carries gasoline from El Paso to Phoenix, said Claudia Chandler, assistant executive director of the California Energy Commission.

Arizona supplies have been little affected by the shutdown of a segment of the pipeline between Tucson and Phoenix, but traders appear to be betting that California gasoline will be diverted to Arizona, she said.

California refiners are barely able to satisfy demand for the cleaner-burning gasolines required in California and Arizona, so any refinery or pipeline problems put pressure on prices.

“This price increase in California seems to be a result of speculation ... because the market is so volatile,” Chandler said. “This is all happening in a month when gasoline consumption is historically at a high point.”