California drivers are on edge as gas prices inch perilously close to $6 per gallon, driven by persistent refinery issues. The statewide average for regular gasoline stood at $5.79 per gallon on Thursday, marking a 29-cent increase from the previous week and a 54-cent surge from last month, as per AAA data. In some locales such as Long Beach, the costs have already breached the $6 threshold, with a gallon of gas costing $6.06, up by 70 cents within a month.
The blame for this alarming uptick in prices is being placed on a series of refinery outages, according to Andy Lipow, President of Lipow Oil Associates. The chain of disruptions began with Hurricane Hilary, which resulted in power outages, followed by issues at several Chevron refineries, including those in the Bay Area and Los Angeles. Adding fuel to the fire, PBF Torrance refinery in Torrance, California is also shutting down several gasoline-producing units for scheduled maintenance. With 90% of California’s gasoline consumption reliant on in-state refineries, these unplanned outages are directly contributing to the escalating pump prices.
California Gas Prices Nearing $6 per Gallon Due to Refinery Issues
California is experiencing a sharp rise in gas prices, with the average cost of a gallon of regular gasoline now hovering around $5.79, 29 cents higher than a week ago, and 54 cents higher than last month, according to data from AAA.
Skyrocketing Gas Prices Across California
In certain areas, gas prices have surged beyond the $6 mark, like in Long Beach where prices are currently at $6.06 a gallon, up 70 cents over the past month. Alpine County, located on the state border with Nevada, is seeing the average price of gas nearing the $7 per gallon mark.
Refinery Outages to Blame
Lipow Oil Associates President, Andy Lipow, attributes this drastic increase to refinery outages. A series of these outages have occurred, starting with power outages caused by Hurricane Hilary, followed by problems at Chevron refineries in the Bay Area and in Los Angeles. Additionally, the PBF Torrance refinery in Torrance, California, is shutting down several gasoline-producing units for scheduled maintenance.
Impact on In-State Consumption
The California Energy Commission reports that 90% of the gasoline consumed in California is from in-state refineries. Therefore, significant unplanned refinery outages contribute to the price hikes at the gas pump. West Coast gasoline inventories were at their lowest level going into Labor Day this year since October 2022. California’s refinery capacity is down by 9.5% since 2020, and the situation is expected to worsen by the end of the year with the shutdown of Phillips 66 refinery in the Bay Area.
The Ripple Effect on Other States
These refinery issues are also affecting drivers in other states. For example, refineries in Texas and New Mexico, which supply gasoline to Arizona, have also encountered operational problems. As a result, Arizona turns to California for additional supply, thereby pushing up prices in Arizona as well, which currently stands at $4.65 per gallon, an increase of 14 cents over the past week and up 42 cents from a month ago.
AAA spokesperson Andy Gross believes that this "pump pain in that region will last until the refineries are back up to speed." As these refinery issues persist, the dramatic increase in gas prices continues to affect not only California but also other states that rely on its supply.
The ongoing refinery issues in California highlight the importance of maintaining infrastructure to prevent significant disruptions that can have a rippling effect across states. The situation also underscores the need for diversification of energy sources to reduce overdependence on a single source that can be susceptible to such problems. The ongoing situation provides an opportunity for stakeholders to reassess and plan their energy strategies for the future.