Refinery issues cause sudden spike in California gas prices
Refinery maintenance along the West Coast is being blamed for the sudden spike in the cost of gas across California after weeks of downward trending prices.
Shutdowns, or at the very least reduced production, have been reported at four California refineries, as well as at one in Washington, experts say.
The Golden State is bearing the brunt of these shutdowns, which are triggering a steep uptick in the cost of a gallon of regular unleaded fuel. During the past week alone, according to some industry insiders, prices at the pump have jumped by more than 50 cents.
“The supply is not meeting the demand for gas and that is what is keeping prices going up, especially on the West Coast,” John Treanor, an AAA spokesman, told The Press Democrat.
As of Monday, his agency reported Santa Rosa’s average price for a gallon of regular unleaded fuel was $6. It had been $5.64 last week.
Sonoma County’s average on Monday was $6.03 per gallon, which was outpacing California’s overall average of $5.80 per gallon.
According to Gas Buddy, the online monitor that tracks fuel prices by community, Santa Rosa’s lowest-priced gas is being sold at the 7-Eleven on College Avenue, where regular unleaded was $5.29 per gallon, as of Monday.
Santa Rosa resident Paige Hogan, 33, topped off a Honda Civic for $5.79 per gallon at an Arco station on Fourth Street. She recalled paying closer to $5.25 per gallon less than two weeks ago.
“This is so, so frustrating,” Hogan said. “I filled up because I don’t know if it’s going to get cheaper anytime soon. This needs to last me for a couple weeks.”
Patrick De Haan, Gas Buddy’s head of petroleum analysis, said in a statement that prices in the impacted areas could go up another 25 to 75 cents before the issues are resolved.
Denton Cinquegrana, chief oil analyst with the Maryland-based Oil Price Information Service, wouldn’t rule that out, but he cautioned that fuel prices tend to be unpredictable.
“It’s hard to get a grip on what prices will do,” he said. “Right now, all bets are off.”
De Haan added that one wild card could be Hurricane Ian, which, as of Monday, was approaching the Gulf Coast. Its forward progress could shut down that region’s refineries.
Cinquegrana said only one of the four California refinery shutdowns was unplanned. It occurred at the Richmond-based Chevron Richmond Refinery, which reportedly experienced power problems.
“When you have a power issue, that can sometimes be really difficult to operate around,” he said.
Of the three California refineries undergoing scheduled maintenance, one is in Benicia and the other two are in Los Angeles.
Four concurrent production shutdowns in California is “unfortunate timing,” but it’s impossible for refineries to schedule maintenance around each other, said Severin Borenstein, a UC Berkeley energy economist.
“They definitely cannot talk to each other about their production time. That would be a pretty clear antitrust violation,” Borenstein said.
Until now, California fuel costs followed worldwide trends.
Prices skyrocketed in February when Russia invaded Ukraine, an action that had resounding impact on the global supply of crude oil, which itself directly affects gas prices.
Experts say ongoing fears of a recession had been pushing down gas prices on a global level during the past several months.
About three weeks ago, gas at the Safeway on Mendocino Avenue was $4.94 per gallon. Santa Rosa resident Alex Prince said it gave him hope that the cost of driving would be more affordable by Halloween.
But on Monday, at that same Safeway, Prince paid $5.39 per gallon to fill his Mazda 6.
“It doesn’t make sense,” the 23-year-old said. “Things are fine everywhere else, right?”
On Monday, a barrel of oil sold for as little as $76 — the lowest since January — but that’s a reflection of worldwide trends as opposed to what’s happening on the West Coast.
The cost of driving had been dropping for 14 weeks nationwide before the recent refinery issues developed. Those, however, are specific to the West Coast and gas prices across the rest of the country are in better shape.
New York gas stations, for example, charged an average of $3.68 per gallon as of Monday, according to AAA.
“I don’t know that I’ve ever seen a wider gamut of price behaviors coast to coast in my career,” De Haan said.
You can reach Staff Writer Colin Atagi at firstname.lastname@example.org. On Twitter @colin_atagi