Short supplies keep gas prices rising in Calif.

By Gillian Flaccus

Associated Press

Published: Friday, Oct. 5 2012 5:50 p.m. MDT

Costco members fill up with discounted gasoline at a Costco gas station in Van Nuys, Calif., Friday, Oct. 5, 2012. Californians woke up to a shock Friday as overnight gasoline prices jumped by as much as 20 cents a gallon in some areas, ending a week of soaring costs that saw some stations close and others charge record prices.

Damian Dovarganes, Associated Press

LOS ANGELES — California gas prices continued surging Friday, adding another 17 cents per gallon on average, and the increases are expected to continue for at least several more days, ensuring long lines and short tempers at pumps around the state.

A week of soaring costs has led some stations to close and others to charge record prices — in some places $5 or more — as California leapfrogged Hawaii as the state with the most expensive fuel. The average price for a gallon of regular unleaded across California was nearly $4.49 on Friday, 32 cents more than a week ago and the highest statewide average in the nation, according to AAA's Daily Fuel Gauge report.

The national average is about $3.79 a gallon, the highest ever for this time of year. However, gas prices in many other states have started decreasing, which is typical for October.

Rebecca Olson, 43, of Irvine, drove to a Costco in Tustin hoping to find lower prices than the $4.65 in her neighborhood, but the pumps were closed.

The part-time preschool teacher said her husband already spends $500 a month on gas, in part because he commutes nearly 100 miles a day to a new sales job after being unemployed for a year.

"All of this is killing us, just because we've got big cars," she said.

They've already parked their GMC Yukon SUV indefinitely. If gas prices keep rising, Olson said they'll sell her husband's Infiniti G35 that requires premium fuel and buy a more efficient car, while making their children ride their bikes to their activities.

"Just last night, we were looking at economical cars, we were car shopping," she said.

The average price for regular gasoline in California hit an all-time high of $4.61 per gallon in June 2008. That could be eclipsed this weekend.

Patrick DeHaan, senior petroleum analyst at GasBuddy.com, expects the increase in prices will slow for several days and then level off. He predicted the average price would peak around $4.85.

A web of refinery and transmission problems is to blame, analysts said. The situation is compounded by a pollution law that requires a special blend of cleaner-burning gasoline from April to October, said Denton Cinquegrana, executive editor of the Oil Price Information Service, which helps AAA compile its price survey.

"We use the phrase 'the perfect storm,' and you know what, this current one makes those other perfect storms look like a drizzle. I don't want to scare anyone, but this is a big problem," Cinquegrana said. "Run-outs are happening left and right."

Among the recent disruptions, an Aug. 6 fire at a Chevron Corp. refinery in Richmond left one of the region's largest refineries producing at a reduced capacity, and a Chevron pipeline that moves crude oil to Northern California also was shut down.

There was some good news. Exxon Mobil Corp. said a refinery in Torrance returned to normal operations Friday after a power failure limited production for most of the week.

But gasoline inventories in California are still at their lowest point in more than 10 years, a situation made worse by the mandate for the special summer gasoline blend. Few refineries outside the state can make it, meaning there are few outside sources to draw from for help, Cinquegrana said.

The California Air Resources Board was reviewing a request from the California Independent Oil Marketers Association for a waiver that would allow gas stations to begin selling winter-blend gasoline before Halloween.

David Clegern, a spokesman for the air board, said there is no timeline for a decision. The California Energy Commission must review gas inventories to confirm there is a shortage and assess what effect the switch would have on air quality, he said.

Get The Deseret News Everywhere

Subscribe

Mobile

RSS