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April 20, 2014

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California refinery fire fuels rising gas prices in Southern Nevada

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Steve Marcus

Kurtis Keeler of Jamestown, New York, replaces a pump after filling up at a gas station on Blue Diamond Road Thursday, April 14, 2011.

Richmond Refinery Fire

People view the fire at the Chevron Richmond Refinery in Richmond, Calif., Monday, Aug. 6, 2012.  The fire, first reported at 6:40 p.m. Monday, is burning in a process unit at the refinery, officials said. It was sending smoke over the cities of Richmond and San Pablo. Launch slideshow »

Southern Nevada residents should prepare to pay more at the pump after an oil refinery fire in Northern California put a squeeze on supply — just in time for end-of-summer travel.

Gas prices in Las Vegas increased on average by 2 cents Thursday, up to $3.42 per gallon for regular unleaded gas, according to AAA data. That was still lower than the statewide average of $3.53 per gallon Thursday.

If 2 cents seems minuscule, AAA spokeswoman Cynthia Harris said to give it a few days.

“Even before this refinery issue, the gas (price) was inching every day by a cent or two or three,” she said. “This is the last of summer travel.”

The Monday evening fire at a Chevron refinery in Richmond, Calif., knocked out a crude oil unit, causing severe damage. The refinery produces 16 percent of the region’s daily gasoline supply.

The Las Vegas Valley receives much of its gas from Southern California, with the rest coming from Utah, Harris said.

But a day after the fire, the wholesale price of gasoline increased by 35 cents per gallon — bad news for consumers who will feel the trickle effect through Labor Day weekend, Harris said.

“Basically, if it goes up on a wholesale level, you know as retailers we will be impacted,” she said.

On the bright side, Nevada gas prices have not eclipsed last summer’s highs. A year ago, the average price in Las Vegas was $3.46 per gallon; statewide, it was $3.54 per gallon, according to AAA data.

Harris said projected increases were speculative, based on a variety of factors beyond the refinery fire, such as ongoing tension in the Middle East.

Tom Kloza, chief oil analyst for Oil Price Information Service, said Southern Nevada residents shouldn’t be too alarmed: He doesn’t think the region will see the “apoplectic” prices of June 2008, when the average price per gallon reached a record high of $4.27 in Nevada.

Kloza said a new pipeline bringing gas from Salt Lake City to Nevada opened late last year, releasing the state from being wholly dependent on California refineries. There are no oil refineries operating in Nevada.

“That has really changed the dynamics of Las Vegas,” he said. “You’re not going to move in lockstep with what happens in California.”

Kloza suspects California gas prices will exceed $4 per gallon, a result of the refinery fire paired with tight supply and high demand. In Nevada, he expects gas prices to be 40 to 50 cents cheaper than in California.

That means more Californians might hit Silver State gas pumps en route to Las Vegas.

“When they’re going there, they’ll definitely want to fuel up on the Vegas side,” he said.

The Associated Press contributed to this story.

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  1. Anyone else notice how often there is something happening to the refineries and the resulting increased cost of gasoline?

    Fires, renovations, and more, seem to be increasing in frequency.

  2. Of course..........a nearly 100 year old refinery that supplies a mere 1/8 of the fuel to California ONLY, impacts the fuel prices here..............BS!!! Big Oil getting richer and richer...why is it that whatever happens to that F'd up state to the west impacts everyone....we get our fuel via pipeline....which originated nowhere near Richmond..

  3. Mark Dunton,
    If it were not for that "...f'd up state to the west..." Nevada would have NO economy. Our state has done much worse than California, more likely because of our collectively ignorant stance on government.

  4. @peacelily

    Do you actually understand why refineries have to keep going down? Crude oil that comes out of the ground has allot of garbage in it that has to be disposed of. Various distillates are extracted, and sulfuric acid is used to further the refinement process for various lubricants. These two items themselves are extremely corrosive, and as the refinement process moves along they damage and destroy the linings of the pipelines in the refineries. That results in a finite lifespan of equipment that limits the amount of gallons that are able to flow through those pipes before they must be replaced. As a result you have to shut down the refinery of course to replace those pipes, distillers, etc. And as demand for petroleum products increases, so does the flow of fluids and the wear on the pipes. Double the production and you've got to replace things twice as often which results in double the downtime that further pushes supply down as demand increases.

  5. I know Jamestown well, a curious choice for this article.