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Gasoline prices spiking higher across region


Tuesday, April 15th, 2014
Issue 16, Volume 18.


RIVERSIDE - Refinery outages and other supply chain kinks are pushing gasoline prices higher throughout the Inland Empire, where the average price for a gallon of fuel rose today to $4.24, a market watcher said.

"It's a bad situation, but not unprecedented," Marie Montgomery of the Automobile Club of Southern California told City News Service. "Almost everything that drives prices in California can be attributed to local issues, and that's what's going on now."

Since March 31, prices have climbed steadily in Southern California, where the cost of gas is the highest of anywhere in the continental United States, according to AAA. Only Hawaii is more expensive, at $4.31 per gallon for regular gas, AAA's Daily Fuel Gage Report shows.

"We've had two refineries go offline longer than anticipated -- during a time when refineries should be stepping up production as demand increases approaching the summer driving season," Montgomery said.

One refinery is operated by Exxon in Torrance; the other by Tesoro in Richmond.

"There have also been actual supply and distribution issues getting ethanol to California from other areas of the country," Montgomery told CNS. "A lot of trains that would otherwise be shipping ethanol here are being diverted to handle shipments from the Bakken oil fields (in North Dakota)."

Ethanol is one of the additives used in California's unique blend of CARB gas, which market analysts point out increases costs to consumers. California also has the third-highest fuel taxes in the country, trailing only New York and Pennsylvania, according to state-by-state comparisons. Advertisement
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Some oil analysts blamed price shocks on geopolitical concerns, including tensions in Ukraine, which have led to crude trading higher. But Montgomery told CNS that has not been a factor in regional fuel prices, nor have annual refinery switchovers during which processors shift from producing winter- to summer-grade gasoline.

"That has all been pretty much priced in since last month," Montgomery said.

She said Southern California motorists are bearing the burden that Northern California residents -- especially in the San Francisco Bay area -- usually "suffer" before their neighbors to the south.

"Some of the average prices in Northern California are still under $4 per gallon," Montgomery said. "The refineries up there are pretty location- specific."

While the Riverside metropolitan area price is high, it's still less than the average for a gallon of regular octane in Los Angeles -- $4.29 per gallon.

Prices should begin to creep lower as refining and supply issues are resolved, according to analysts.

Today marked the 12th consecutive rise in the average price of a gallon of self-serve regular gasoline in the Inland Empire, increasing 1.4 cents to $4.242, its highest amount since March 8, 2013.

The average price in Riverside and San Bernardino counties has risen 21.1 cents over the past 12 days, including 1.6 cents on Monday, according to figures from the AAA and Oil Price Information Service.

The average price is 16.1 cents more than one week ago, 24.6 cents higher than one month ago and 25.1 cents above what it was one year ago.


 

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