Rising gas prices leave consumers with questions

2:14 PM, Aug 10, 2012   |    comments
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RICHMOND, Calif. (AP) - As gas prices rise nationwide, California is stuck in a perfect storm, with prices approaching $4 a gallon. Rising gas prices leave concerned consumers with several key questions. The cause of the rising gas prices is a combination of factors that add up to bad news for California drivers.

Crude and ethanol prices are driving gasoline prices up nationwide. Meanwhile, a fire at a large California oil refinery, which sent hundreds to hospitals with health complaints, is making matters worse in the state.

The partial shut down of on refinery affects gas prices in the state for many reasons. California's pollution laws require cars to use a special blend of gasoline. While it results in cleaner air, the specialized blend is up to 15 cents more expensive.

When a fire Monday took down a part of Chevron's refinery in Richmond, it reduced the capacity of this large facility that produces 15 to 16 percent of the state's special blend of fuel. The laws mean the state can't easily replace that supply with dirtier gas from other areas.

Gas prices have changed since Monday's fire, on Friday, the average price for a gallon of regular gasoline in California was $3.99, up from $3.86 on Tuesday. The national average was $3.66 on Friday.

This surge in prices has caused consumers to fear their pocket books, and how high prices could actually go. Analysts say prices could pass $4 by Monday. Beyond that, it's not clear.

It could be weeks before the refinery's production could be back on track. Chevron won't speculate on when the crude unit that was the site of the fire will be back up and running. Federal and state investigators are still waiting to gain access to the site of the fire to collect evidence. Once the inspectors finish their work, the company can begin repairs.

Some analysts say gas prices in Oregon and Washington could also be affected by the fire. Refineries in those states could make the cleaner burning gasoline blend needed in California. That would reduce the supply of the blends used in those states, which could affect prices there.

The Associated Press

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