Gas price spike strikes California commuters
(MoneyWatch) California commuters are in for a world of pain, as a series of breakdowns and glitches have produced a temporary shortage in gasoline severe enough to send pump prices soaring. By mid-afternoon Thursday, the average price of gasoline had jumped by 16 cents - the biggest one-day gain in history - to nearly $4.50 per gallon, says Patrick DeHaan, senior petroleum analyst with GasBuddy.com.
And the rising prices are far from over: Analysts were predicting that prices could exceed the all-time high of $4.61 set back in 2008 before the shortage was over. Indeed, one more refinery outage could send pump prices over $5 a gallon, said Tom Kloza, chief analyst at the Oil Price Information Service.
"I have never seen a market take off like this, particularly at this time of year, without an act of God -- like a hurricane," Kloza said. "California is always in an orbit all its own, but this is extraordinary."
Notably, gas prices are actually falling in the rest of the country, as they tend to do after the summer driving season ends on Labor Day. Nationwide, retail gas prices were at $3.79 at the end of the day Thursday, down a half-cent from the day before, according to GasBuddy.
California's drivers, on the other hand, appear to be victims of a series of minor glitches and breakdowns that were turned acute by hot weather and the state's unique air quality regulations that make it impossible to ship refined gasoline in from other states. Where other states have moved to winter gasoline mixtures that allow the addition of plentiful but volatile fuels such as butane, California's hot climate means that the state's refiners must stick to the less combustible summer mixes until the end of October. Additionally, the California Air Resources Board demands a special brew of chemicals that burn cleaner than gasoline made in other states.
That means that shortages can strike whenever a few of the state's refiners go off line -- as one did due to a power outage and several had done over the last week for scheduled maintenance. A pipeline breakdown also contributed to the shortage, which is now so acute that several retail gas stations have closed due to insufficient supply. GasBuddy was reporting Thursday, for instance, that Costco's station in Azusa was out of gas, as were several smaller independent stations.
On the bright side, most analysts expect the current shortage to be relatively short-lived, predicting that prices will go back to normal within a week or two - or at least by the end of the month. That doesn't mean that drivers in the Golden State will get the same (relatively) good deals on gasoline that you'd see elsewhere. California prices are almost always between 30 cents and 40 cents higher than the national averages. But Kloza was predicting that prices would edge back to the low $4 range by the end of the month.
In the meantime, the best advice is to drive less and check pump prices from home before you fill up. Los Angeles prices listed at GasBuddy.com on Thursday ranged from a low of $4.03 per gallon at an independent station in El Segundo to a high of $5.69 at the Low-P station in Calabasas.
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