Business & Real Estate

Sacramento-area gas prices spike 26 cents in one week; refinery shutdowns a factor

Just two weeks ago, the average retail price of gasoline in the Sacramento area was less than $3 a gallon, and analysts were suggesting that we might be headed for a highly unusual price plunge right up to Memorial Day weekend.

They did, however, note that things could change due to unforeseen circumstances – refinery disruptions, for example. Unfortunately for motorists, that’s precisely what happened.

Temporary shutdowns at two key California refineries last week helped drive the average retail price of gasoline in the Sacramento area up 25.9 cents to $3.23 a gallon, according to national gas price tracker GasBuddy.com.

The latest surge in gas costs surprised and upset local motorists who talked with The Bee on Monday.

“It went up a quarter overnight I think,” said Sacramento resident Janey Tibbs, filling up her sport-utility vehicle at the Chevron station at 19th and Broadway in Sacramento, where unleaded regular was posted at $3.45 a gallon. “It always goes up. ... I just wonder how it goes up so quickly and takes forever to go down. It’s very upsetting, because it hits us in the pocketbook.”

At the 76 station at 15th and X streets, unleaded regular was going for $3.29 a gallon. As he filled his Ford Fusion, 46-year-old Mike James, a Sacramento restaurant worker, shook his head and noted: “I was paying under $3 just last week. How does it happen so fast? It’s unfair. It feels like somebody’s pulling the strings, and we pay the price.”

The region’s current price is 14.5 cents higher than it was one month ago but 87.9 cents lower than this time last year.

Allison Mac, a Los Angeles-based petroleum analyst for GasBuddy, said the Chevron refinery in Richmond had to go offline for a couple days last week to deal with flaring issues. She said the Tesoro refinery in Martinez also went offline temporarily with some operational glitches.

She said both refineries are back up and running now, “but it’s not like turning a switch and you’re back to 100 percent right away. It takes awhile to come back fully.”

Mac said the state’s fuel supply, which must be blended to specific standards to meet California’s environmental requirements, is “very tight” right now.

State environmental regulations mandate that in-state refineries produce a California-specific fuel blend. So when something happens to disrupt production at a major California refinery, the ripple effect is sometimes immediate and dramatic.

“Our margin of error is so small,” Mac said.

On April 13, GasBuddy said the Sacramento area’s average retail price of gas had fallen to $2.93 a gallon, making a fifth consecutive week of declines. That streak came on the heels of a nearly $1 spike in at-the-pump costs between Feb. 1 and March 7. Analysts said the February-March surge was driven by soaring wholesale gas costs, in-state refineries switching over to pricier spring/summer gas blends and a United Steelworkers union strike idling workers at Tesoro’s California facilities in Carson and Martinez.

Mac said wholesale gas prices have ballooned amid the most recent refinery disruptions. The wholesale price in San Francisco on Monday was $2.46 a gallon, up from the $1.80 to $1.90 range just a couple weeks ago.

Barring further refinery problems, Mac said, “prices should taper off and not spike as dramatically at the end of this week.”

Nationwide, GasBuddy said, the U.S. average retail price of gas rose 8.2 cents over the past week to $2.54 a gallon, up 10.7 cents from last month and $1.16 below the year-ago level.

Call The Bee’s Mark Glover, (916) 321-1184.

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