Sacramento, CA — Bay Area gasoline prices have spiked 20 cents over the last week, driven by the cycle of refinery maintenance and low inventories that Governor Newsom is seeking to remedy with legislation he wants debated in a special legislative session.
Gas prices in Southern California have remained relatively flat (up 1 cent over the last week), while San Francisco gasoline prices spiked at $5.07 cents per gallon (up from $4.87 per gallon a week ago.)
Operational problems at two of the three refineries in the area and low inventories are driving the price spike. Industry sources report that Valero Benicia had problems since late August that have not resolved and Chevron has apparently been working on a Fluid Catcracker at Richmond, CA since August 30.
ABX2 1 (Hart, Aguiar-Curry) will allow the Energy Commission to require minimum inventories of oil refiners so that they have enough supply during times of maintenance that gas prices don’t spike.
“If Assembly members want to know why they are in special session they only need to look at the gas prices in the Bay Area,” said Jamie Court, president of Consumer Watchdog. “The current Bay Area price spikes are a poster child for the need for Governor Newsom’s special session reform. Gas prices spiked 20 cents in a week because the refiners were not prepared for maintenance, which translates to big profits for refiners and big losses for consumers. Requiring adequate inventories is the way to deal with this problem. Refineries are only using 55% of their storage and inventories have been at low points for the year. This late summer, early fall cycle of price spikes is exactly what Governor Newsom seeks to remedy with ABX2 1.”
