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West Coast spike in gas prices tied to refineries

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By Steven Dubois
Associated Press
PORTLAND, Ore. -- Motorists across most of the country have been getting a break on the price of gas, but not on the West Coast.
The average price for a gallon of regular gasoline in Oregon was $4.17 Monday, up 16 cents from last week. The average was $4.20 in Washington state and $4.35 in California. Both of those states also had double-digit increases.
Meanwhile, the national average price dropped 5 cents to $3.73.
"The West Coast is zigging while the rest of the country is zagging," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service.
A shortage of gasoline tied to issues at the region's refineries has caused prices to spike in the wholesale market, analysts said.
Gasoline supplies in California are down more than 20 percent from a year ago. West Coast gasoline stocks haven't been this low in the month of May since May 1992, according to the Department of Energy.
"That's a long time, especially when you consider how many vehicles have been added to the fleet," Kloza said.
Gas prices increased sharply across the U.S. in recent months because of a run-up in the cost of crude oil. But the price of a barrel has slid to less than $95, providing a bit of relief to drivers in most places.
The West Coast switches to a more expensive fuel blend in summer to fight pollution, but analysts blame the current price spike on the failed restart of a BP refinery in Blaine, Wash., and maintenance work at several California refineries.
The BP refinery, the third-largest on the West Coast, produces 20 percent of Washington's gasoline needs but has been shut down since a February fire. The company planned to restart last week, but that has been pushed back because of an undisclosed problem.
Alison apRoberts, a California Energy Commission spokeswoman, said the decision to suspend the restart likely led BP and others to buy gasoline on the wholesale market to cover their contractual obligations.
Meanwhile, five of California's 12 refineries -- three in the San Francisco Bay Area and two in Southern California -- temporarily reduced production because of planned maintenance.
Kloza and other analysts expect the surge in prices to be short-lived as refineries return to typical production.
"This isn't the new normal, and it's not the arrival of those apocalyptic predictions of $5 to $6 gasoline," he said.
Story tags » Energy & Resources



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