Meager stockpiles of California's cleaner-burning gasoline helped drive pump prices to record heights in recent weeks and are setting the stage for more of the same this summer, energy experts said Wednesday.
That point was underscored in a report by the Santa Monica-based Foundation for Taxpayer and Consumer Rights, which accused oil companies of squeezing on-hand inventories to boost profits at the expense of consumers across the West.
For The Record
Los Angeles Times Friday May 26, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 49 words Type of Material: Correction
Gasoline supplies: An article in Thursday's Business section about California gasoline inventories cited a Bloomberg News report that the Exxon Mobil Corp. refinery in Torrance had not resumed production after a fire in February. In fact, an Exxon Mobil spokeswoman said, the refinery returned to full operation last weekend.
Many industry and government experts do not blame the oil companies, but they have grown increasingly worried that the United States -- and California in particular -- has too little fuel in reserve to keep small supply disruptions from causing price spikes at the pump.
Refiners in California recently have kept enough gasoline in storage to satisfy the state's needs for 18 days, according to the consumer group's analysis of Energy Department data. If fuel production faltered, it could take 11 to 40 days to bring in replacement supplies because no pipelines bring fuel from other refining centers, the report said.
Elsewhere in the country, fuel stockpiles typically cover 30 to 35 days' worth of demand, according to a study by Stillwater Associates, an Irvine consulting firm.
"Are inventories here too low? Yes. Have inventories been too low in California for a long time? In my opinion, yes," Stillwater President David Hackett said.
Joe Sparano, president of the Western States Petroleum Assn., dismissed assertions that oil companies do not keep enough fuel on hand.
"Why would anyone keep inventories higher than they need to be if they can operate smoothly and efficiently with what they have?" Sparano asked. "I don't know that it leaves the state more vulnerable."
In recent weeks, California retail gasoline prices have jumped beyond the increases seen elsewhere in the nation. The statewide average hit a record high May 18 of $3.379 for a gallon of self-serve regular, according to AAA's daily survey. California's average eased Wednesday to $3.36 a gallon -- but was 49 cents a gallon above the national average and about 88 cents higher than a year earlier.
Nationwide, the average gasoline price rose sharply in March and April to more than $2.90 a gallon, but did not reach the record $3.057 a gallon hit in September after refinery damage from hurricanes Katrina and Rita cut into fuel production. Experts blamed this spring's increase on rising oil prices, higher-than-normal refinery maintenance and fears that a transition to ethanol-blended gasoline in parts of the country would trigger supply glitches.
