As California gas prices rise, Gov. Jerry Brown orders early sale of cheaper winter-blend fuel
10/07/2012 06:00:43 PM PDT
10/08/2012 09:44:17 AM PDT
Costco members fill up with discounted gasoline at a Costco gas station in Van Nuys, Calif., Friday, Oct. 5, 2012. Californians woke up to a shock Friday as overnight gasoline prices jumped by as much as 20 cents a gallon in some areas, ending a week of soaring costs that saw some stations close and others charge record prices. (AP Photo/Damian Dovarganes) (Damian Dovarganes)
com'>GasBuddy.com, predicted the average price could peak as high as $4.85 before coming back down.
A note on a gas pump at Porgieís Liquor & Deli in Hesperia, Calif. indicates they are out of regular and unleaded plus gasoline, Friday, Oct. 5, 2012, after the owners shut off their pumps earlier this week while keeping the convenience store open. "It's like buying gas at $9 a gallon and selling it for $5. We're a mom and pop gasoline station, if we can't make any money, it's pointless," said an employee of the store who wished to remain anonymous. (AP Photo/The Victor Valley Daily Press, David Pardo) (David Pardo)
LOS ANGELES -- California motorists faced another day of record-breaking gasoline prices Sunday, though relief appeared to be on the way.
Gov. Jerry Brown ordered state smog regulators Sunday to allow winter-blend gasoline to be sold in California earlier than usual to help drive prices down. Winter-blend gas typically isn't sold until after October 31. | » CHART: The economics of gasoline
Few refineries outside the state are currently making summer-blend gas, putting the pressure on already-taxed California manufacturers.
"Gas prices in California have risen to their highest levels ever, with unacceptable cost impacts on consumers and small businesses," Brown said in a letter. "I am directing the Air Resources Board to immediately take whatever steps are necessary to allow an early transition to winter-blend gasoline."
In its latest update early Sunday, AAA reported that the statewide average price for a gallon of regular unleaded gasoline was $4.66. Saturday's average of $4.61 was the highest since June 19, 2008.
Analysts said consumers should receive Brown's statements with cautious optimism.
Availability of the winter blend sooner means consumers won't have to wait until the end of the month to see prices go down at the pumps.
"That's good news," said Bob van der Valk, an independent oil analyst from Terry, Mont.
But prices are not expected to drop immediately because it will be a week before the winter blend is transferred, he added. In fact, prices may go up before the week ends.
"The bottom line is, it will relieve us from having one week of pain instead of three," Van der Valk said. "There's not going to be a drop this week, but it will be put an end to the shortage and gas stations will have gas again."
Patrick DeHaan, a senior petroleum analyst at Gasoline prices higher than $5 per gallon are posted at a Menlo Park, Calif., Chevron station on Friday, Oct. 5, 2012. Californians woke up to a shock Friday as overnight gasoline prices jumped by as much as 20 cents a gallon in some areas, ending a week of soaring costs that saw some stations close and others charge record prices. The average price of regular gas across the state was nearly $4.49 a gallon, the highest in the nation, according to AAA's Daily Fuel Gauge report. (AP Photo/Noah Berger) (Noah Berger)
Meanwhile, state Sen. Diane Feinstein issued a second call on Sunday to the Federal Trade Commission to investigate the spike in gas prices. Historically, some gas price spikes were the result off "malicious and manipulative trading activity," Feinstein said, and not shortages.
"California commuters are facing the highest gas prices and the longest commutes in the country," Feinstein wrote in the letter to FTC chairman Jon Leibowitz
"Paying hundreds of dollars to fill your tank every time you go to the pump is untenable, particularly because it does not appear the price spike and supply disruption are related to supply and demand."
Sunday's price, like Saturday's, was the highest in the nation, with the Golden State overtaking Hawaii as the state with the most expensive fuel due to a temporary reduction in supply.
In some locations, fuming motorists paid $5 or more per gallon while station owners had to shut down pumps in others.
A station in Long Beach had California's priciest gas at $6.65 for a gallon of regular, according to GasBuddy.com. Meanwhile customers at an outlet in San Pablo paid just $3.49, the lowest price in the state.
The average for a gallon of regular was $4.69 in Los Angeles, $4.71 in San Diego and San Francisco, $4.55 in Sacramento and $4.90 in Santa Barbara, according to GasBuddy.com.
The dramatic surge came after a power outage Monday at a Torrance refinery that reduced supply in an already fragile and volatile market, analysts said. The refinery came back online Friday and prices were expected to stabilize in the coming days.
Staff writer Susan Abram contributed to this report.