Calif. gov. takes action as gas prices keep rising
Gov. Jerry Brown is taking action in an effort to drive down the cost of gasoline as California drivers cope with record-breaking prices at the pump.
For the second straight day Sunday, the statewide average price for a gallon of regular rose to an all-time high, hitting $4.655, according to AAA.
That topped Saturday's price of $4.6140, which broke the previous record high of $4.6096 per gallon set on June 19, 2008. That's up nearly 17 cents a gallon from Friday's average prices and up 48 cents a gallon from a month ago, AAA says.
Due to a temporary reduction in supply, California gas prices in recent days have surpassed those in Hawaii to become the highest in the nation.
Brown on Sunday ordered state smog regulators to allow winter-blend gasoline to be sold in California earlier than usual to bring down prices. Winter-blend gas typically isn't sold until after October 31.
Few refineries outside the state are currently making summer-blend gas, putting the pressure on already-taxed California manufacturers.
In some locations, fuming motorists paid $5 or more per gallon while station owners had to shut down pumps in others.
A station in Long Beach had California's priciest gas at $6.65 for a gallon of regular, according to GasBuddy.com. Meanwhile customers at an outlet in San Pablo paid just $3.49, the lowest price in the state.
The average for a gallon of regular was $4.69 in Los Angeles, $4.71 in San Diego and San Francisco, $4.55 in Sacramento and $4.90 in Santa Barbara, according to GasBuddy.com.
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. 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 before coming back down.
Analysts say relief may be on the way, with a decline possible in coming days or weeks as supplies stabilize and California refineries -- some beset by unexpected shutdowns -- restore production and make the annual fall shift to an easier-to-produce winter blend.
"Probably by the middle of this week, people are going to start to see some improvements'' in price, Gregg Laskoski, senior petroleum analyst with GasBuddy.com, said Sunday.
That relief can't come soon enough for California motorists. They have seen daily jumps in average prices hit a record $4.655 a gallon statewide for regular on Sunday.
Many stations, both major brands and independents, had pump prices well above $5.00 a gallon for regular. There were gas lines in a few areas as some independent stations closed when they were unable to buy more supply on the spot market or were unwilling to pay the going price, said petroleum analyst Bob van der Valk.
GasBuddy.com's California price monitoring page showed prices as high as $6 a gallon at one independent retailer in Simi Valley, and more than a dozen others with prices ranging from $5.39 to $5.79 a gallon.
The rise in prices that began in August pushed California past Hawaii as the state with the highest average gasoline prices, according to auto club AAA.
Nationwide, the average price was $3.81 a gallon, AAA said.
Sen. Dianne Feinstein, D-Calif., on Sunday asked the Federal Trade Commission to investigate whether gas prices in the state were being illegally manipulated.
"California's consumers are all too familiar with energy price spikes which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and manipulative trading activity,'' she said.
Petroleum analysts say California's problems have been compounded by a combination of reduced production at refineries and an annual shift from a summer gasoline blend to a winter blend with fewer additives.
California's standards for refined gasoline exceed federal standards, so oil companies cannot just send gasoline refined in other states to shore up California's troubled supply, Laskoski said.
Last week's price surge followed a shutdown at a refinery in Torrence, Calif., that is expected to resume production this week. Supplies were already weak as a result of an early August fire at a Chevron refinery in Richmond, Calif. In addition, Laskoski said,several other refineries have been hit with maintenance problems.
Tupper Hull, spokesman for the Western States Petroleum Association, an industry trade group, said California's gasoline market is always closely balanced. Any disruption at 14 refineries in the state meeting, or commodity traders' worries over supply, can trigger volatility in prices, he said.
"Replacing lost production is more difficult here,'' Hull said. "It takes a little longer than it does in other parts of the country. You can't just redirect product in the pipeline like you can in almost every other market.''
"All of these things collectively created just a huge problem on the supply side,'' Laskoski said.
Rising prices have also brought gasoline thefts.
In Roseville, Calif., police are seeking two people suspected of stealing 750 gallons of gasoline from a Shell station, Police Sgt. Jeff Kool said. He said thieves somehow defeated the gasoline pump's meter controls and filled external tanks in a pickup during visits in the early-morning hours over three days.
"With prices in the upper $4 a gallon, gasoline is obviously more valuable,'' Kool said. "It's a criminal opportunity.''
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