Calif. Gasoline Prices Hit All-time High – Twice

(AP) Calif. gasoline prices hit all-time high – twice
By CHRISTOPHER WEBER
Associated Press
LOS ANGELES
California motorists faced another day of record-breaking gasoline prices Sunday, though relief appeared to be on the way.

In its latest update early Sunday, AAA reported that statewide average price for a gallon of regular unleaded gasoline is $4.655. Saturday’s average of $4.6140 was the highest since June 19, 2008, when it was $4.6096.

The four-penny-per-gallon jump Sunday was less than Saturday’s increase, which was 12 cents.

Sunday’s price, like Saturday’s, was the highest in the nation, with the Golden State leapfrogging Hawaii as the state with the most expensive fuel due to a temporary reduction in supply. Californians are paying 24 cents per gallon more than motorists in Hawaii, according to the AAA report.

In some locations, fuming motorists paid $5 or more per gallon while station owners had to shut down pumps in others.

AAA’s Daily Fuel Gauge report said the national average both Saturday and Sunday was about $3.81 a gallon, the highest ever for this time of year. However, gas prices in many other states have started decreasing, which is typical for October.

The dramatic surge came after a power outage Monday at a Southern California refinery that reduced supply in an already fragile and volatile market, analysts said, but the refinery came back online Friday and prices were expected to stabilize in the coming days.

Patrick DeHaan, senior petroleum analyst at GasBuddy.com, predicted the average price could peak as high as $4.85.

When supplies drop, wholesale prices rise. Then distributors and station owners have to pay more to fill up their station’s tanks. They then raise their prices based on how much they paid for their current inventory, how much they think they will have to pay for their next shipment, and, how much their competitors are charging.

A web of refinery and transmission problems is to blame, analysts said. The situation is compounded by a California pollution law that requires a special blend of cleaner-burning gasoline from April to October, said Denton Cinquegrana, executive editor of the Oil Price Information Service, which helps AAA compile its price survey.

Among the recent disruptions, an Aug. 6 fire at a Chevron Corp. refinery in Richmond that left one of the region’s largest refineries producing at a reduced capacity, and a Chevron pipeline that moves crude oil to Northern California also was shut down.

___

Contributing to this report were AP writers Sandy Shore in Denver, Gillian Flaccus in Los Angeles, John Marshall in San Francisco and Gosia Wozniacka in Fresno.