Gas prices in California remain significantly higher than they were prior to the Aug. 6 fire at Chevron's Richmond oil refinery – despite the fact that the blaze didn't impact gasoline production in the state as initially feared.

In fact, the state's refineries churned out more gasoline last week than they did the week before the fire, not less.

Production of California-grade gasoline jumped 12.4 percent, nearing 6.8 million barrels for the week, according to an update from the California Energy Commission. The rise came in spite of – and probably in response to – the fire that seriously damaged California's third-largest refinery, which typically makes about 15 percent of the state's gasoline.

"Other refiners around the state picked up the slack," said commission spokesman Rob Schlichting.

The situation infuriates oil industry critics. Gas prices shot up in the days after the fire, jumping 24 cents per gallon in the first week. But the extra cost wasn't the result of an actual shortage. Instead, analysts say, the increase started with traders bidding up the wholesale price in expectation of a shortage in the first few days after the fire.

"They're looking for any real or perceived impact to supply and demand," said Cynthia Harris, spokeswoman for AAA of Northern California. "It's a perceived lack of supply here."

$4.12 average price

At the same time, refineries outside Richmond started charging more; gas station owners followed suit. Some station owners tried to get ahead of the increase, raising retail prices the night of the fire because they knew they'd soon have to pay more for wholesale gas.

California's average for a gallon of regular hit $4.12 on Friday, according to the AAA automotive club. The national average reached $3.72. On Aug. 6, the day of the fire, the California and national averages were $3.85 and $3.62, respectively.

The day after the fire, gas on the wholesale spot market for the Bay Area jumped 37 cents, to $3.34 per gallon, according to data from Bloomberg. But the spot price peaked at $3.39 on Aug. 9 and has been falling ever since, reaching $3.14 on Friday.

"It appears to be a situation where the refineries, the wholesalers and the gas stations – although their margins are a lot slimmer – are all trying to take money off the table as fast as they can," said Liza Tucker, a consumer advocate with the nonprofit group Consumer Watchdog.

Oil industry representatives bristle at the suggestion that the companies are doing anything improper.

"A number of agencies, many of them with subpoena power, have looked very carefully at the California market over the past decade," said Tupper Hull, spokesman for the Western States Petroleum Association. "Dozens of times has this industry been investigated, and never have they found any manipulation of the market."

Free market?

To many analysts, the increase just shows the free market at work, even if drivers may not like the results.

"Chevron isn't making money off this," Schlichting said. "It's supply and demand. When people envisioned tight supplies, prices went up. And when they found out supplies weren't that tight, (wholesale) prices went down."

While wholesale spot prices have declined, retail gasoline prices haven't. In fact, they're still rising. But California's average price for gas is now inching up less than a penny per day, the same rate as the rest of the country. Prices nationwide have been pushed higher by a rally in the market for crude oil. They also tend to rise in the weeks before Labor Day, as vacation season drives up the demand for fuel.

California refineries appear to have responded to the Richmond blaze by shifting the slate of products they make. They scaled back, dramatically, the amount of gasoline they produce for neighboring states. California uses its own pollution-fighting gasoline blends found nowhere else. While refineries here focus on producing California-grade gasoline, they also make gas for other markets. Nearly 100 percent of the gasoline sold in Nevada, for example, comes from California.

Last week, production of non-California gasoline at California refineries dropped 27.8 percent, to 746,000 barrels.

David R. Baker is a San Francisco Chronicle staff writer. E-mail: [email protected]