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California gas prices ease fractionally; Chevron refinery closure may keep prices up longer

October 10, 2012 12:00:00 AM PDT
California gas prices eased fractionally Wednesday, but a Chevron refinery closure through the rest of the year might keep prices high even longer than expected.

The refinery in Richmond closed in August after a fire. Chevron has announced the damage from that explosion will leave the facility at reduced capacity through the end of the year, keeping supply tight.

Gas prices dropped less than one cent overnight after five days of staggering increases that saw prices near $5 a gallon.

The average price for a gallon of regular gas is $4.70 in the Los Angeles and Long Beach area and $4.68 in Orange County, the Inland Empire and Ventura County. Prices are up about 50 cents in the last week.

"It affects every level of the economy, from someone who wants to go out and buy a hamburger to someone who wants to go out and buy a Lamborghini," said motorist Craig Melone.

"It's crazy. I understand the law of supply and demand but this is way out of control," said motorist John Denniston.

Drivers can only shake their heads and do what they have been doing since prices spiked; continue to cut corners wherever they can to save on fuel.

Nevertheless, it is especially hard on small business owners.

"It's made it harder to operate. It's cutting down on my bottom line. You can't raise prices to the extent that they raise the gas prices," said landscaper Manuel Vaca.

Prices at USA Gasoline station in Chatsworth start at $4.65 for regular unleaded, which is below the county average. Yet even clerks who work at the station are filling up elsewhere when they see a bargain.

"I drive around because my car does take quite a bit of gas; down by my house, I found maybe about 10 cents cheaper. I definitely keep my eyes out for it," said gas station clerk Faith Boyd.

Analysts say refinery disruptions and corrosion problems in a pipeline are to blame for the spike in prices at the pump in California. Gas companies cite the laws of supply and demand. Refineries were in the middle of switching from winter blend gasoline to summer blend gasoline, then a power outage occurred last week at the Exxon Mobil refinery in Torrance.

"I don't think that two refinery incidents are sufficient to justify raising the prices," said Vaca.

"We are making transportation fuels and lubricants but at a reduced capacity," said Sean Comey of the Chevron Corporation. "Chevron continues to be adequately supplied to meet our customer's demands for fuel."

Senators Barbara Boxer and Dianne Feinstein are calling for a federal investigation to look into the price spike in California. In the meantime, state leaders have approved the early release of winter blend fuel to help bolster supplies and lower prices. Winter-blend gas typically isn't sold until Oct. 31.

"Immediately that had an impact on gas prices," said Marie Montgomery, spokeswoman for the Automobile Club of Southern California. "The whole sale prices are going down very rapidly."

"I'll believe it when I see it. Hopefully they'll get back under control," said Denniston. "I fill up twice a week. That's $100 a pop."

Gas prices in California are higher than in any other state. The increasing cost of gas is forcing many Southern Californians to find alternate forms of transportation, such as the bus or train. Metrolink reported a definite increase in ridership recently. Others are simply trying to save every little bit of gas.

"I only put in $10 this morning. That's only a quarter of a tank," said motorist Ramon Vasquez.


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