Richmond oil refinery fire expected to raise gas prices


Consumer advocates say a major fire at an oil refinery in the San Francisco Bay area, one of the country's largest, will push gas prices above $4 for a gallon of regular on the West Coast.

"This system is made to break. When it breaks, because there is so little inventory, like 10 days in California, it allows the companies to raise prices really quickly and make a big profit," said Jamie Court of

Bob van der Valk, a petroleum industry analyst who once worked as a pricing specialist, said any hiccup in production has an impact.

"It causes prices to increase almost overnight," he said.

But a spokesman for the trade group representing oil companies denies that the gasoline market is that sensitive.

"There are constant ebbs and flows in the demand for fuel and typically they happen without any noticeable impact on the marketplace," said Tupper Hill of the Western states Petroleum Association.

Van der Valk said the fire could not have happened at a worse time. The summer grade gasoline needed this season is more labor intensive to produce.

It may be October, he says, before consumers see relief at the gas pump.

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