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Gas prices skyrocket

Posted: October 4, 2012 2:00 a.m.
Updated: October 4, 2012 2:00 a.m.
 

The average price of a gallon of gas in California soared to its highest level in four months, and as motorists fumed over prices Wednesday analysts said even larger increases may be on the way.

AAA’s Daily Fuel Gauge Report had the statewide average of a gallon of unleaded gasoline at $4.23 per gallon Wednesday. That is a 10-cent increase from a week ago and a five-cent increase from Tuesday to Wednesday.

But Patrick DeHaan, an analyst for GasBuddy.com, said gas prices could increase as much as 60 cents per gallon. Wholesale prices have risen by $1.15 in the last eight days, which means that, to break even on the fuel they buy today, stations will have to charge between $4.75 and $4.95 a gallon, DeHaan estimated.

The highest recorded statewide average for gasoline was $4.61, recorded in June 2008, according to AAA.

“And this could just be the tip of the iceberg,” DeHaan said. “Things could get much, much worse.”

California has been plagued by refinery shortages since August. A Chevron refinery in Richmond, the largest-capacity plant in Northern California, has been running at limited capacity since a fire at the facility Aug. 6.

Two events Monday have likewise caused wholesale price increases that may soon translate to the pump. A temporary power loss occured at an ExxonMobil facility in Torrance and Chevron’s Kettleman-Los Medanos pipeline was shut down after elevated levels of organic chloride were found in the oil, which can cause severe corrosion.

Saugus resident Ofelia Hurtado, who had just finished filling up her SUV Wednesday at $4.43 a gallon at a Chevron off Bouquet Canyon Road, said gas price increases make her rethink even the shortest trips, such as taking her three children to see their grandparents in Newhall.

“I can either spend $2 on the bus, or $4 to $5 just driving there,” she said. “I’ll even avoid driving to the park if this keeps up.”

Marie Montgomery, a spokeswoman for the Automobile Club of Southern California, said price increases could also be a result of the state’s pending switch from summer-blend to winter-blend gasoline, which typically occurs near the end of October.

Winter gasoline is largely cheaper to produce, but if refinery capacity is compromised that could cause short-term price increases because summer-blend gasoline stock is already dwindling, she said.

“When something goes wrong, like a fire or a pipeline being shut down, that does tend to create a big problem,” Montgomery said.  

DeHaan cautioned drivers against making a run to fill up on gasoline before prices rise higher.

“This is a supply-driven issue,” he said. “Further constraining the supply is just going to make things worse.”

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