Fuel Prices Spike Following Chevron Fire

The average price of gasoline hit $4 a gallon in California on Aug. 10, four days after the Chevron oil refinery fire, and will likely climb even higher according to analysts.

In a San Francisco Chronicle report, Denton Cinquegrana, the West Coast spots editor at Oil Price Information Service, called the surging fuel prices “a foregone conclusion,” and said how high the prices will go depends on how long it takes Chevron to repair the damage to the Richmond, Calif. facility — the third largest in the state — or for other refineries to increase oil production.

California’s environmental rules require a special blend of gasoline, says NPR, which means it can’t simply import gas from other states.

The 2,900-acre Richmond refinery produces 16 percent of the region’s daily gasoline supply, according to the Associated Press, which reports that the fire destroyed a unit that makes a cleaner-burning gasoline that meets air-quality laws in California, Oregon and Washington.

Friday’s $4 a gallon average gas price in California was 18 cents higher than a week earlier, when a gallon of regular gas cost $3.82, according to GasBuddy.com. The website showed prices rising across the US as well, with the average price of regular gasoline jumping from $3.59 a gallon Aug.3 to $3.66 a gallon on Aug.10.

A Chevron spokesman told AP that several factors including rising crude and ethanol costs — not just the refinery fire — were pushing gas prices higher.

Chevron has yet to report on the severity of the damage, says the Los Angeles Times. The company must file a structural engineering report with the state’s Division of Occupational Safety and Health before it is allowed to inspect the tower where the fire began.

The newspaper also reports that Chevron hasn’t said how much fuel the undamaged parts of the refinery are producing. The plant can produce 243,000 barrels a day at its peak.

Chevon says a formal investigation to determine the fire’s cause is under way.