In Los Angeles County, which is by far the largest in the country and has a population of more than 10 million, gasoline has now reached an average price of $6.03 a gallon, according to AAA. Gas prices have also broken the $6 mark in neighboring Ventura County, near San Luis Obispo County and some mostly rural California counties, while other population centers like San Diego counties , San Francisco and Orange are within a cent or two of $6. . average gallon.
But not in California, where average prices continue to rise, up 16 cents to $5.88 a gallon since hitting the national peak just under two weeks ago. Ditto for Nevada, which gets a lot of gas from its western neighbor, where prices rose 26 cents a gallon to $5.18. In Hawaii, prices rose 25 cents to $5.09 a gallon, closing in on the three states facing $5 plus a gallon for gasoline.
multiple markets
The main reason for the price discrepancy is that there are seven major wholesale gasoline markets in the United States: two in California, one in the Pacific Northwest, and the remaining four spread across the rest of the country. This means, for those who live west of the Rockies, that prices are still rising or flat at best.
Prices rose 7 cents in Utah, which also gets gas from California, to $4.42, and were virtually unchanged in Washington, Oregon and Arizona.
A major factor in the current price spike was the unplanned outage at a major refinery in Torrance, California, three weeks ago, which made the already tight gasoline market even tighter, said Doug Shoppe, a spokesman for the Automobile Club of Southern California.
The loss of even one refinery could cause prices to rise in the West because capacity was steadily declining on the West Coast.
Data from the US Energy Information Administration shows that refining capacity in Western states at the end of last year fell 12% from the end of 2019, before the pandemic, and was down 22% from the end of 2019. 2007, before the Great Recession.
Some of these refineries closed for financial reasons during these difficult economic times. At the moment Some are being converted to process renewable fuels, such as the Marathon Petroleum refinery in Martinez, California. This Gulf area facility stopped refining petroleum products in 2020 and will soon reopen as a renewable diesel refinery.
The loss of that facility, and others, in recent years also means that an unforeseen problem like the Torrance closure could disrupt wholesale gas markets, said Tom Cluza, global head of energy analysis at the Oil Price Information Service, which tracks AAA gas prices. .
Kloza said concern over stricter environmental regulations in Western countries is preventing oil companies from investing in refineries in the region for fear they will be forced to close in the near future.
“The West Coast is very challenging right now,” he said. “They can use a little more refining power or demand a little less.”
