Gas prices spike in wake of recent Benicia refinery fire
Gas prices spike in California following refinery fire
Yes, gas prices have spiked this week big time. The Valero refinery fire affected supply, but many other factors also caused the budget-busting increases.
SAN RAFAEL, Calif. - Yes, gas prices have spiked this week big time.
The Valero refinery fire affected supply, but many other factors also caused the budget-busting increases.
Monday's fire at the Valero refinery is causing both short-term and long-term chaos for the Bay Area gasoline market.
Week-over-week, AAA's says national regular gas prices were $3.25 a gallon; a three-cent decline from the same day last week.
But, California prices statewide are $4.85 a gallon now; $1.60 higher than the U.S. average and eight cents higher than a week ago.
In the Bay Area, the average price is $5.12 a gallon, almost $2 per gallon more than the national average and 18 cents a gallon higher than a week ago.
The highest average price in the Bay Area, in San Rafael, is $5.21 a gallon. That is up a whopping 28 cents a gallon from just last Friday.
Chevron, at $5.89 a gallon for regular, is the undisputed pocketbook buster.
"28 cents a gallon in a week sounds a little bit like some kind of manipulation in pricing if you were to ask me just my instinct on that," said San Rafael resident Dennis Fraez.
"I don't know what to make of it. We're close to refineries," said San Rafael’s Ted Lundquist.
The Valero refinery in Benicia is scheduled to close next April, and another huge Southern California refinery will close in December.
"California has never faced a permanent reduction in production capacity by 21% in our history," said USC Marshall School of Business professor Michael Mische.
On top of that, the voter-approved state Gasoline Excise Tax goes up automatically on July 1 if overall consumer prices rise, which they are.
California’s Cap and Trade program already adds 55 cents a gallon and is likely to rise as oil companies are required to keep more fuel in storage.
Finally, estimates of the new Low Carbon Fuel Standard could add yet another 10 to 27 cents a gallon.
"So, it's a combination of factors that will be compounded and exasperated by the closure of two refineries," said Mische.
And don't forget those unpredictable tariffs.
"We also import over 61% of our oil from foreign sources such as Iraq, Saudi Arabia, Brazil, Ecuador, and Guyana," said Mische.
Mische thinks prices could actually get to $8 a gallon. And you are paying for it.
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