California gas prices are spiking again, and it may get even worse. Here's why

California prices aren't yet at the record state average we saw in June, but they are quickly nearing that number.

ByJ.R. Stone via KGO logo
Wednesday, September 28, 2022
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Refinery maintenance along the West Coast is being blamed for the recent spike in California gas prices.

SAN FRANCISCO -- Refinery maintenance along the West Coast is being blamed for the recent spike in California gas prices.

Insiders say some of that maintenance is happening at the Chevron Refinery and going forward that could contribute to record gas prices in the state.

If the gas prices where you fill up seem like they're a bit higher of late, it's because they are.

"I think it's crazy," said driver Snow Montana.

"They too damn high! I can't afford nothing else really!" said Montana.

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AAA says California is averaging 5.88 cents a gallon for regular unleaded fuel as of Tuesday night. That's up 43 cents from a week ago, up 61 cents compared to a month ago, and $1.49 higher than a year ago.

California prices aren't yet at the record state average we saw in June, but they are quickly nearing that number.

We asked Denton Cinquegrana of the Oil Price Information Service if he thinks we could soon break fuel records in California.

"Yeah I think there is a legitimate shot right now," said Denton.

"I don't think we will hit the record we set back in June but I wouldn't rule it out," said UC Berkeley's Severin Borenstein.

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Borenstein and Cinquegrana are closely monitoring the evolving situation that is hitting California drivers harder and harder each day. The two say, much of this is due to supply at California and Washington refineries where capacity would usually be in the high 80s or low 90s.

"They're operating at only 81% of capacity. That's a combination of the planned maintenance and the unplanned maintenance going on right now," says Denton.

"It appears that a number of refineries went out on planned maintenance at the same time. Then we saw at least one Chevron in Richmond go out in an unplanned manor so suddenly California's gasoline supply was cut back quite a bit," said Borenstein.

In a statement, those at Chevron Richmond say "We do not discuss specific operational details related to our facility," but Borenstein says the situation there has impacted state gas prices.

"The Richmond Refinery situation seems to be the one that was unplanned, that we didn't know was already going to happen, and that is a major supplier of California gasoline so it's disruption probably had a significant effect on gasoline prices," said Borenstein.

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Borenstein says in the short term we'll have to wait this spike out but by shopping around, you can often cut your fuel costs by between 20-40 cents a gallon.

Chevron Richmond issued this statement:

Chevron Richmond continues to operate and remains focused on operating our facilities to safely and reliably provide the energy products that Bay Area consumers need. We do not discuss specific operational details related to our facility.

Many factors figure into the price of a gallon of gasoline including some unique ones specific to California. In addition to the price of oil, other factors include the competitive conditions in the marketplace, the higher cost to produce gasoline to the specifications required by the California Air Resources Board, costs associated with fuel distribution, local, state and federal taxes, California carbon-compliance costs, recent inflationary pressures, and fixed costs of doing business that are often higher in California relative to other states (e.g., the cost of commercial real estate). The majority of our branded stations in California are owned by independent businesspeople who make their own decisions about the prices to charge at their stations.

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