Gas Prices Climb Higher in the Valley

January 19, 2009 12:00:00 AM PST
So far, the New Year has brought with it higher gas prices. But what you may not know is that fuel prices in the Central Valley have gone up twice as much as the rest of the country.There are a number of reasons; one of the biggest ones is the loss of production at a Bakersfield refinery.

Filling up has been a bargain the last few months, especially compared to the record high prices we all paid last summer. But lately the bargains are shrinking. California already has the highest fuel prices in the country because of taxes and a special blend that burns cleaner.

But now, production problems at a Bakersfield refinery and the changing price of crude oil are causing prices to spike even higher in the Valley.

In the last month the national average price of gas has increased 15 cents. In the valley, it's gone up 29 cents, almost double the national average.

While the rest of the country is paying about $1.82 for a gallon of unleaded, those of us in the Valley are paying an average of $2.13, and market experts believe the upward trend will only continue.

Scott Cain is a wholesale fuel distributor. He said prices around the Valley could go even higher now because the Flying J, which owns the big west refinery in Bakersfield, just filed for bankruptcy.

"I'm very concerned about that situation," said Cain, "they're a big enough player in the local diesel market where if they exit the market permanently that could have a major impact on diesel prices in this area."

The California Energy Commission reports a huge drop in the state's demand for gas in the last year which helped bring down those record-high prices. But now with the loss of production in Bakersfield and the fluctuating price of crude, experts claim it's anyone's guess how high prices at the pump could go this time.

"It certainly would create a situation where the product delivered by Big West would have to come from somebody else and somewhere else," said Joe Sparano with West States Petroleum Association.

And there is always an extra cost when you import anything.

Oil industry analysts also said another reason for the higher fuel prices in California is because refineries are using blends with a higher profit margin.

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