California Gas Prices Rise to New Records as Supply Shortages Persist

An oil refinery displays an American flag in Wilmington, Calif., on Sept. 21, 2022. Allison Dinner/Getty Images

Refinery shutdowns and production problems across California are causing a spike in the state’s gas prices—as much as 15 cents a day.

Californians were paying $6.29 on average, as of Sept. 30, for a gallon of gas—about 66 percent more than the national average of $3.80, according to the Automobile Club of Southern California.

Local wholesale gas prices are now 35 cents higher than their all-time record in June, when prices climbed to an average of $6.26 in Los Angeles, according to the auto club.

“This week saw the most significant gas price increases since they jumped 77 cents in one week in March,” said Doug Shupe, spokesman for the auto club, in a statement. “Until the state receives significant amounts of imported gasoline and local refineries are fully operational again, we will likely continue to see pump price increases.”

Gas station signs display the price of gas in Los Angeles on Sept. 21, 2022. Allison Dinner/Getty Images

In the Los Angeles-Long Beach area, the average price reached $6.38, which was about 76 cents more than last week and $2.28 more than last year at the same time.

In Orange County, the average price reached $6.39, a 79-cent jump from last week and $2.01 from a year ago.

The skyrocketing cost is mostly caused by four refinery shutdowns in the state.

A Chevron refinery in Richmond, California, was the largest gasoline production facility in the state to close for unexpected repairs Sept. 11. The facility usually produces 245,000 barrels a day.

A view of the Chevron refinery in Richmond, Calif., on Nov. 17, 2021. Justin Sullivan/Getty Images

Other large plants were offline for scheduled maintenance, including Phillips 66. The company has shut down its 139,000-barrel-a-day refinery in Wilmington, in the Los Angeles area after a fire Sept. 16.

Additionally, Valero’s plant in Benicia, which produces 145,000 barrels each day, closed for maintenance.

“When one of these big plants goes down, that’s an issue, but when you’ve got four of them down, that’s a real problem,” Ed Hirs, an energy economics lecturer with the University of Houston, told The Epoch Times. “That means right now, the consumer in Los Angeles is competing with the consumer in Paris, or Berlin, or the North Sea, to buy that gallon of gasoline.”

California consumes 33.3 million gallons of gas a day, according to the U.S. Energy Information Administration, which normally can be satisfied by the state’s own production. But with four refineries down, more of the supply has to come from other states or countries at higher prices.

Container ships and oil tankers wait in the ocean outside the Port of Long Beach-Port of Los Angeles complex, amid the coronavirus disease pandemic, in Los Angeles, Calif., on April 7, 2021. Lucy Nicholson/File/Reuters

To meet the state’s growing demand, at least one tanker is now altering course to California.

“Right now, they’re diverting a tanker that would ordinarily be taking gasoline to Europe because of the [U.S.] sanctions on Russian oil and fuel,” Hirs said.

The California refineries and gasoline markets are also not regulated, Hirs said. Everyone is raising prices to compete for fuel, and those costs are passed on to the consumer.

It’s hard to predict how long the refineries will be down, experts say.

Western States Petroleum Association, a trade organization for the industry, couldn’t discuss specific refinery operations and maintenance because of antitrust laws, but told The Epoch Times companies were doing all they could to mitigate the situation.

Traffic flows along San Diego roadways in San Diego, Calif., Aug. 31, 2006. Sandy Huffaker/Getty Images

“No one likes high fuel costs, it affects us all,” said Kara Greene, spokeswoman for the petroleum association. “Right now, we are experiencing the effects of a supply in California that is not keeping up with demand. Despite bans, mandates and other policies that can increase energy costs, our members are doing all they can to produce and refine more energy and fuels to keep up with demand.”

The first $1.28 of each gallon purchased by consumers in California goes directly to state-imposed taxes, fees, and regulatory programs. The policies are getting more restrictive and costly every year, according to Greene.

Meanwhile, prices could continue to rise for five to 10 days until the refineries start operating again, petroleum expert Patrick De Haan with GasBuddy, a fuel price database, told The Epoch Times.

“Every situation is a little bit different,” Haan said. “Usually, it can take a couple of weeks for refineries to get completely back to normal.”

U.S. President Joe Biden announces the release of 1 million barrels of oil per day for the next six months from the U.S. Strategic Petroleum Reserve, as part of administration efforts to lower gasoline prices, during remarks in the Eisenhower Executive Office Building’s South Court Auditorium at the White House in Washington, on March 31, 2022. Kevin Lamarque/Reuters

Another factor that could push prices up in the future is the drawdown and possible refilling of the national Strategic Petroleum Reserve.

President Joe Biden’s administration has withdrawn nearly 200 million gallons of oil from the reserve since October 2021 in an attempt to lower record gas price hikes amid fuel shortages. The reserve held about 443 million barrels Sept. 23, a decrease from 615 million barrels Oct. 15, 2021, according to data released by the U.S. Energy Information Administration.

The drawdown is scheduled to end in October. If the administration decides to restock the reserve, it could cause the prices to rise again, Haan said.