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Calif. Gasoline Prices Hit All-Time High - Twice

6:21 AM, Oct 8, 2012   |    comments
A customer fills up in Los Angeles on October 5th (image credit Frederic J. Brown/AFP/Getty)
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Los Angeles (written by William M. Welch/USA Today) -- California's gasoline price misery is worsening, with prices exceeding $5 a gallon at some stations.

Analysts say relief may be on the way, with a decline possible in coming days or weeks as supplies stabilize and California refineries -- some beset by unexpected shutdowns -- restore production and make the annual fall shift to an easier-to-produce winter blend.

"Probably by the middle of this week, people are going to start to see some improvements'' in price, Gregg Laskoski, senior petroleum analyst with GasBuddy.com, said Sunday.

That relief can't come soon enough for California motorists. They have seen daily jumps in average prices hit a record $4.655 a gallon statewide for regular on Sunday. That's up nearly 17 cents a gallon from Friday's average prices and up 48 cents a gallon from a month ago, according to AAA's Daily Fuel Gauge Report.

In Los Angeles the pain was even worse: Average prices for regular on Sunday in the L.A. metro area were $4.696, up 3.5 cents overnight, and premium was going for an average $4.893.

Many stations, both major brands and independents, had pump prices well above $5.00 a gallon for regular. There were gas lines in a few areas as some independent stations closed when they were unable to buy more supply on the spot market or were unwilling to pay the going price, said petroleum analyst Bob van der Valk.

GasBuddy.com's California price monitoring page showed prices as high as $6 a gallon at one independent retailer in Simi Valley, and more than a dozen others with prices ranging from $5.39 to $5.79 a gallon.

The rise in prices that began in August pushed California past Hawaii as the state with the highest average gasoline prices, according to auto club AAA.

Nationwide, the average price was $3.81 a gallon, AAA said.

Sen. Dianne Feinstein, D-Calif., on Sunday asked the Federal Trade Commission to investigate whether gas prices in the state were being illegally manipulated.

"California's consumers are all too familiar with energy price spikes which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and manipulative trading activity,'' she said.

Petroleum analysts say California's problems have been compounded by a combination of reduced production at refineries and an annual shift from a summer gasoline blend to a winter blend with fewer additives.

California's standards for refined gasoline exceed federal standards, so oil companies cannot just send gasoline refined in other states to shore up California's troubled supply, Laskoski said.

Last week's price surge followed a shutdown at a refinery in Torrence, Calif., that is expected to resume production this week. Supplies were already weak as a result of an early August fire at a Chevron refinery in Richmond, Calif. In addition, Laskoski said,several other refineries have been hit with maintenance problems.

Tupper Hull, spokesman for the Western States Petroleum Association, an industry trade group, said California's gasoline market is always closely balanced. Any disruption at 14 refineries in the state meeting, or commodity traders' worries over supply, can trigger volatility in prices, he said.

"Replacing lost production is more difficult here,'' Hull said. "It takes a little longer than it does in other parts of the country. You can't just redirect product in the pipeline like you can in almost every other market.''

"All of these things collectively created just a huge problem on the supply side,'' Laskoski said.

Rising prices have also brought gasoline thefts.

In Roseville, Calif., police are seeking two people suspected of stealing 750 gallons of gasoline from a Shell station, Police Sgt. Jeff Kool said. He said thieves somehow defeated the gasoline pump's meter controls and filled external tanks in a pickup during visits in the early-morning hours over three days.

"With prices in the upper $4 a gallon, gasoline is obviously more valuable,'' Kool said. "It's a criminal opportunity.''

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