Strike, refinery explosion help send gas prices higher

WALNUT CREEK (KTVU and wires) – Prices continued to rise at gas pumps around the Bay Area Thursday as a one-two punch of a strike at a key Northern California refinery and an explosion at a Southern California refinery impacted fuel production in the state.

At a Shell station in Walnut Creek, the price of unleaded gas went up from $2.85 a gallon to $2.89 early Thursday morning.

Mark Walker was filling up at the station and looked on as the prices were being changed.

"It was nice while it (lower gas prices) lasted," he told KTVU Fox 2. "I kinda expected it. I think everyone did. We just were riding it while it lasted."

Nearby, Jessica Flores was fueling up her new Chevy Tahoe and having second thoughts about her recent vehicle purchase.

"It's a bummer," she said. "I didn't expect this (the price rise). I thought prices would stay lower for another few years – but what can we do?"

The blast at the Exxon Mobil Corp. facility in Torrance Wednesday occurred in a recently installed processing facility. The four-story structure was shattered, and four contractors suffered minor injuries.

The refinery about 20 miles south of downtown Los Angeles covers 750 acres, employs over a thousand people and processes an average of 155,000 barrels of crude oil per day. It produces 1.8 billion gallons of gasoline per year, which accounts for about 8.3 percent of the state's total refining capacity.

Gas prices in California had been inching up even before the blast.

Allison Mac, West Coast petroleum analyst for, said the accident could contribute to an immediate spike of 7 to 15 cents per gallon, but the effects are likely to remain limited to Southern California.

There are refineries in the region that produce nearly twice as much, so it should not cause a major dent in supply, Mac said. "It's not like we were at 100 and now we're at zero," she said.

Tom Kloza, chief oil analyst at the Oil Price Information Service, agreed.

"You're not going to see another gasoline apocalypse" like after the 2012 Chevron refinery fire in Richmond, California, that helped send gas prices over $4 a gallon, he said.

It was not clear what caused the explosion or how much work at the refinery was disrupted. Company spokesman Todd Spitler only said other parts of the facility continue to operate.

The Exxon Mobil refinery is the second in the state to encounter production interruptions. A Tesoro refinery in Northern California — which accounts for about 9.2 percent of the state's total refining capacity — was shut down earlier this month after the contract with the United Steelworkers union expired.