California gas prices surge: 20 cents overnight in some places

California gas prices are soaring because of refinery outages and pipeline problems. Gas prices at some Los Angeles stations now top $5 a gallon.

Jonathan Alcorn/Reuters
A sign posted with gasoline prices is seen at a Mobil gas station in Santa Monica, Calif., Oct. 4, 2012. California gas prices, up an average 18 cents in a week, are on track to break a record set in the summer of 2008.

Landscaping business owner Sebastian Figueredo stood Thursday at a Union 76 gas station near the San Francisco-Oakland Bay Bridge, holding his phone up high so he could get a photo of theprice sign.

A gallon of regular at the station was selling for $4.79, up from $4.59 the day before. Premium gasoline was $4.99.

"Every time these go up, I can't just raise my hourly rate up as well," Figueredo complained.

Throughout California, the average price of a gallon of regular gasoline jumped 8 cents overnight to $4.32 and was up 18 cents during the past week, according to the AAA's Daily Fuel Gauge.

Analysts said it was poised to quickly soar past $4.37 a gallon — the high so far this year — after refinery outages and pipeline problems left the state short on supplies.

The highest average price ever for regular gasoline in the state was $4.61 in 2008.

Among the recent disruptions, an Aug. 6 fire at a Chevron Corp. refinery in Richmond left one of the region's largest refineries producing at a reduced capacity. A power failure in Southern California has affected an Exxon Mobil Corp. refinery, and a Chevron pipeline that moves crude to Northern California was also shut down.

Elsewhere, the national average for gas is $3.78 a gallon, the highest ever for this time of year. However,gas prices in many states have started moving lower, which is typical for October.

But in California, gasoline inventories are the lowest in more than 10 years — a situation made worse by the state's strict pollution limits that require a special blend of cleaner-burning gasoline.

Patrick DeHaan, senior petroleum analyst at GasBuddy.com, said he is seeing the highest prices in the state around Los Angeles, where at least five stations have crossed the $5 a gallon mark, including $5.29 in Burbank and $5.11 in Norwalk.

Prices will keep rising, he says, because in the past week wholesale gasoline prices have jumped $1 a gallon, but average retail prices have only increased 30 cents.

"This is one of the easiest forecasts: Retail prices are going to skyrocket," he said.

The jump in wholesale prices can be particularly tough on independent gas stations that often pay more for their gas because they are not part of a larger chain.

Tom Kloza, chief oil analyst at Oil Price Information Service, said he's heard of a few California station owners shutting their pumps rather than charging the $4.90 a gallon or more necessary to break even.

"Wholesale price increases lead to retail price increases," Kloza said. "But there is some restraint among companies who do not want to exercise their current pricing power and irritate their customers."

At the San Francisco 76 station, the 42-year-old Fugueredo believes the push for profits by oil companies is behind the increases.

"I heard that the recent heat wave had affected refineries in California, and the Chevron refinery blew up. But the oil companies are just greedy," he said, standing next to his white panel van.

Other San Francisco motorists have been taking the recent price spikes mostly in stride, but now that gas is closing in on $5 a gallon, some are considering changing their transportation habits.

"I might actually park my car for a while and start biking," said Sam Hewatt, 25, who was filling his sedan with $4.99-a-gallon premium.

Some analysts believe prices nationally will begin to decline soon but say California could see a longer spike given its unique fuel requirements.

"Nationally, I believe most prices will wobble to and fro for the next week or so, with an eventual slow but steady attrition in retail gas prices, particularly in the Midwest and Southeast," Kloza said. "California is a wild card."

AP Energy Writers Jonathan Fahey in New York and Sandy Shore in Denver contributed to this report.

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