ALERT: California Gas Prices Up 40 Cents This Week; A Buck Over National Average, Driven By Refiner Shortages and Outages

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Santa Monica, CA—The price of a gallon of regular gas in California spiked up another 40 cents this week and now stands at $3.59 a gallon at the pump due to fresh problems refineries have tried to conceal, Consumer Watchdog said today. Californians are now paying exactly a dollar more than the US average.
“By keeping the system running on virtually empty and the market in the dark, refineries have created a system where the smallest outage causes a huge price spike that leads to big profits,” said Consumer Advocate Liza Tucker. “The Senate must act to protect consumers by demanding that refineries keep more supply on hand and publicly report planned and unplanned outages.” 
Tucker said that Chevron’s El Segundo refinery, which represents 14 percent of California’s gasoline refining capacity, has been hobbled by one planned, and one unplanned, equipment outage, and reiterated Consumer Watchdog’s call on the state legislature to subpoena refinery executives to appear before lawmakers. “It’s time for these CEOs to explain outrageous price hikes as the Senate continues its investigation of a market structured to gouge consumers instead of compete for them.”
According to industry insiders, Chevron has been buying large quantities of gasoline on the spot market this week to meet contractual obligations to gas stations and other wholesale buyers. Chevron shut down its Fluid Catalytic Cracker for planned maintenance, but its Reformer, another piece of equipment used to make gasoline components, went down unexpectedly. 
“Taking 14 percent, or close to it, of refinery capacity offline in California means a major dent in the supply of gasoline,” said Tucker. “Because only four companies control 78 percent of California’s refining capacity, instead of competing with one another to grab market share on the back of Chevron, all refineries simply mark up the price of gasoline across the board.” 
Compounding problems, Exxon’s Torrance refinery, which represents about 8 percent of California’s refining capacity, is not expected to come on line until July, if at all, in the wake of a massive explosion in February, said Tucker. Chevron’s Richmond refinery briefly experienced a problem last week when its Fluid Catalytic Cracker went down, pushing gas prices up in Los Angeles by 30 cents a gallon overnight, according to industry sources. Tesoro’s Carson refinery is also buying on the spot market as it is having trouble keeping up with gas station demand. 
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Liza Tucker
Liza Tucker
Liza Tucker is a consumer advocate for Consumer Watchdog, following everything from oil and gas to the regulation of toxic substances in the state of California. She comes to us from Marketplace, the largest U.S. broadcast show on business and economics heard by ten million listeners each week on 400 radio stations. Liza worked at this public radio show for a decade, first as Commentary Editor and then as Senior Editor for both Washington and Sustainability News.

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