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California gas may hit $4 this weekend; L.A. and O.C. already there

August 10, 2012|By Ronald D. White
  • Fire damage viewed from the air at Chevron's Richmond, Calif., refinery. The refinery is operating at reduced production levels, which is raising prices at the gas pump.
Fire damage viewed from the air at Chevron's Richmond, Calif., refinery.… (Aric Crabb / Contra Costa…)

The average retail price for a gallon of regular gasoline in California climbed an additional 5.9 cents overnight to $3.986, according to the AAA Fuel Gauge Report. The state's average is almost certain to cross the $4-a-gallon mark sometime over the weekend.

The California average has climbed 11.1 cents in just the past two days, and some parts of the state are already averaging more than $4 a gallon.

San Francisco gas prices crossed that threshold Thursday and rose to $4.066 a gallon Friday. Los Angeles and Long Beach joined the $4 club overnight, rising 5.7 cents to an average of $4.013 a gallon. Orange County also hit the mark overnight, rising 5.6 cents to an average of $4 a gallon.

Retail gasoline is still catching up to the fact that U.S. oil prices climbed during most of July. The price of a barrel of oil on the New York Mercantile Exchange is down 39 cents so far Friday to $93.05, but that is still more than $24 a barrel higher than it was in late June.

The much more recent catalyst for higher fuel prices was Monday's fire at Chevron Corp.'s Richmond refinery in Northern California. The fire broke out at the facility's No. 4 crude unit Monday evening, knocking it out of commission.

The Richmond refinery is the state's third-biggest, with an operating capacity of 243,000 barrels a day. It is an important fuel provider for Southern California.

Crude units fulfill an early stage in the refining process, distilling oil into various fractions of different boiling ranges, each of which are then processed further in the other refinery processing units, Chevron said.

The parts of the refinery that were not affected by the blaze are operating, but Chevron has said in statements that it is producing fuel in reduced amounts.

Chevron has released its first written report on the incident, in a document sent to the Contra Costa County Department of Health Services. The report offered information on the amount of and type of chemicals in the refinery's flare emissions and other basic information.

Chevron was required to submit the report because of the requirements of Contra Costa County's 72-hour Incident Notification Policy. The report is mainly a summary of the incident, including the amount and kind of emissions released, as well as a summary of Chevron's response.

The report did not speculate on the cause of the fire or give an estimate of the amount of damage.

Some fuel experts said that the refinery fire has Chevron looking to buy vacuum gasoil to help it maintain production at the refinery. Brad Arrington of the Oil Price Information Service said that vacuum gasoil is the primary feedstock for the production of gasoline and other products.


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