Gasoline prices jump in California as refineries encounter trouble
Problems at some of the state’s fuel refineries have sent gasoline prices soaring in California just in time for the kickoff of the busy driving season.
A gallon of regular gasoline hit a statewide average of $4.196 on Thursday, up about 13 cents in a week, according to AAA. That’s the highest price since March 2013.
If gas prices keep surging, David Buzzo plans to cut down on dinners out and impulse purchases. Buzzo, a supervisor of field services for Southern California Edison, said he’s always conscious of every uptick in price when filling up.
“That takes away other money, luxury money,” the 59-year-old Hollywood resident said. “I’m looking into taking trains or the Metro instead of driving.”
In Los Angeles, gas stations are charging $4.303 on average, which is 15 cents higher than a week earlier. San Francisco drivers have it a little better, paying an average of $4.219, up about 11 cents in a week.
The U.S. average of $3.657 is up less than a nickel from the previous Thursday.
Come springtime, prices usually start rising as California refineries switch from winter-blend gasoline to a pricier blend of summer fuel, which takes longer to make and requires more expensive additives to meet environmental standards.
But problems at a few refineries in the Golden State undergoing routine spring maintenance have squeezed inventory and boosted prices, analysts said. And only a handful of refineries outside the state are capable of making the ultra-clean type of gasoline mandated in California.
“A couple of refinery issues have started to flare up, which is fairly normal this time of the year,” said Patrick DeHaan, senior petroleum analyst at GasBuddy.com, a fuel price tracking website.
However, the refinery snags have been extensive enough to temporarily reduce gas inventories in the state 17% compared with this time last year, DeHaan said.
Aside from production issues, bad weather has also played a role in pushing up costs at the pump.
The price of ethanol, which is a component of gas, has jumped because of drought-withered corn crops and idled ethanol plants. The summer driving season also got off to an early start this year, as people cooped up during the winter hit the road to enjoy the sun.
“People have gotten cabin fever and got out and started driving a little earlier,” said Bruce Bullock, executive director of Southern Methodist University’s Maguire Energy Institute. “We saw an uptick in demand in mid- to late March.”
Uncertainty surrounding the crisis in Ukraine is also having a small effect on oil markets and retail gasoline, industry watchers say.
“There is a risk premium in every barrel of oil that is sold,” Bullock said.
Analysts are divided on when gas prices will start dropping but agree that the climb won’t go as long or as high as after a major Chevron refinery fire in 2012. Some say that costs could edge up an additional 10 to 20 cents a gallon, while others forecast prices going down within two weeks.
“The prices you see this Easter weekend are probably the highest you will see,” barring unforeseen events such as refinery fires, earthquakes or power outages, said Tom Kloza, chief oil analyst at GasBuddy.
Cas Donovan said she can’t wait for prices to fall. The 52-year-old Venice resident drives cross-country every summer to her vacation house in New York state. But with costs soaring, she’s considering shipping her car instead and hopping on a plane to save time.
“The costs won’t be too different,” said Donovan, who works as an assistant director on films and TV shows. “I’m shocked.”
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