Gas Prices Quickly Rise After Richmond Refinery Fire
RICHMOND (CBS SF) -- Wholesale gas prices spiked Tuesday throughout California in the aftermath of a fire that shut down Chevron's Richmond refinery, which is one of the top crude production facilities for the West Coast.
CBS San Francisco first reported the likelihood of the spike within hours of the blaze igniting on Monday evening. Then overnight, wholesale prices in northern California went from $2.94 to $3.32 a gallon and in southern California jumped from $2.97 to $3.31.
"Typically, retail prices run slightly over 75 cents per gallon over wholesale," Matt Skryga, a gas price analyst for AAA, told CBS 5, "and West Coast wholesale prices are moving up dramatically based on the loss of the supply."
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The West Coast is particularly vulnerable to spikes in gasoline prices because it's not well-connected to the refineries along the Gulf Coast, where most of the country's refining capacity is located, the Associated Press reported.
"It (the Richmond Chevron Fire) will impact the West Coast on a short term basis," probably through at least Labor Day, Tom Kloza, chief oil analyst at Oil Price Information Service, told CNN. "It's a very key refinery."
Chevron's refinery is particularly big and important to the market, Kloza explained, because it produces about 150,000 barrels of gasoline a day -- 16 percent of the West Coast's daily gasoline consumption of 963,000 barrels.
With inventories of gasoline in the region already low compared with the rest of the country, pump prices in the Bay Area and beyond on the West Coast will soon average more than $4.10 per gallon, Kloza predicted.
Chevron spokespeople told reporters on Tuesday that there was no information available as to when the refinery could be restarted and they declined to comment on the impact the shutdown was having on the gasoline market.
(Copyright 2012 CBS San Francisco. All rights reserved.)
