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July 30, 2014

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Californians wake up to huge spike in gas prices

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Damian Dovarganes / AP

Motorist Tony Klein fills up his 1967 Cutlass V-8 at a gas station in Los Angeles Thursday, Oct. 4, 2012. Motorists in California paid an average of $4.232 per gallon Wednesday. That’s 45 cents higher than the national average and exceeded only by Hawaii among the 50 states.

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A pedestrian looks at high gasoline prices at a gas station in Los Angeles Thursday, Oct. 4, 2012. Motorists in California paid an average of $4.232 per gallon Wednesday. That’s 45 cents higher than the national average and exceeded only by Hawaii among the 50 states.

LOS ANGELES — Californians woke up to a shock Friday as overnight gasoline prices jumped by as much as 20 cents a gallon in some areas, ending a week of soaring costs that saw some stations close and others charge record prices.

The average price of regular gas across the state was nearly $4.49 a gallon, the highest in the nation, according to AAA's Daily Fuel Gauge report.

In Southern California, the price jumped 20 cents a gallon overnight to $4.53 in Ventura. And in the Los Angeles-Long Beach area prices went up 19 cents to nearly $4.54. It wasn't any better to the north, as a gallon of regular gas in San Francisco averaged nearly $4.60.

In many areas, prices have jumped 40 cents in a week as refinery problems have created shortages and helped send wholesale prices soaring. Some stations ran out of gas and shut down Thursday rather than pay those costs.

Even Costco Wholesale Corp., the giant discount store chain that sells large volumes of gas, decided to close some stations

"We do not know when we will be resupplied," read a sign at one Southern California Costco, according to the Los Angeles Times.

Other gas stations charged more than $5 a gallon. The Low-P station in Calabasas charged $5.69 Thursday. The pumps bore hand-written signs reading, "We are sorry, it is not our fault," the Times said.

While gas prices have spiked around the nation, refinery outages and pipeline problems have added to woes in California.

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, and a Chevron pipeline that moves crude to Northern California also was shut down.

There also was a power failure that affected an Exxon Mobil Corp. refinery in Torrance, but a company spokeswoman said Friday that the refinery has resumed normal operations and would be able to meet all of its contractual commitments.

The national average for gas is about $3.79 a gallon, the highest ever for this time of year. However, gas prices in many states have started decreasing, which is typical for October.

Hawaii usually has the nation's most expensive gas, but California leapfrogged the Aloha State on Friday. The average price in Hawaii was about 8 cents a gallon less than in California.

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 during hot summer months.

The California Air Resources Board was reviewing a waiver filed by the California Independent Oil Marketers Association, which represents independent station operators, requesting that they be allowed to begin selling so-called winter blend gasoline before the scheduled Oct. 31 switch.

David Clegern, a spokesman for the air board, said there is no timeline for a decision. The California Energy Commission must review actual gas inventory to determine if there is really a shortage and assess what effect the switch would have on air quality, he said.

Patrick DeHaan, senior petroleum analyst at GasBuddy.com, said prices will keep rising because in the past week wholesale gasoline prices have jumped $1 a gallon, but average retail prices have increased only 30 cents.

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

Some analysts think 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."

Contributing to this report were AP Energy Writers Jonathan Fahey in New York and Sandy Shore in Denver, AP writer Juliet Williams in Sacramento and Sun staff writer Conor Shine.

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  1. Let's face it, this is a nightmare coming to our neighborhood & soon. It's exactly what Osama Obama promised if elected. He said "Energy prices would necessarily skyrocket." So, who's surprised it has come to pass? The moron-in-chief has wasted up to 90 billion on "green" companies such as Fister, Tesla and Solyndra while, at the same time, stopping nearly all fossil energy expansion on federal lands and vetoing new energy supplies such as the Keystone pipeline and shale oil. Want 4 more years of his moronic nonsense? Then vote for the guy with the Cheshire Cat grin who hasn't a clue as to how to jump-start the economy or reduce unemployment and will continue piling up trillion dollar deficits which will bankrupt the nation and turn the U.S. into a Third World country. Is that the heritage you want to leave for your children and their children, as well? If you do, you should be ashamed of yourself!

  2. I drive an RV to California a couple times a month so that my kids can play at the beach, go to the theme parks, and we can also enjoy some nature. I usually pay around $400 round trip for the gas when it's at the $3.80 range. I guess I'll have to pay a little more next time, maybe what, $150 more? I say who cares. I enjoy having the kids not complain about the trip because they can enjoy playing games, getting something to eat, or taking a nap in a bed if they get tired. I make over $250K a year so a rise in gas doesn't effect me at all. I'm the guy Obama is trying to hurt with the end of the Bush tax credits but that won't even hurt me because like most upper middle income people, I own a business, and I've already set things up so that my company doesn't have to pay any taxes by doing things like buying an RV for the company with company profits and writing off the gas expense to the company. Why? Large billboard on the side of the RV to promote our products make the RV a rolling ad and a tax write-off. Each trip to SoCal I collect business cards and keep a good log of all the business activity that took place. So you see, Obama can't hurt the rich no matter how hard he tries. He can only hurt the poor (and he does). And why should Obama or Michelle care, they're not poor. Bottom line, Omaba-Reid policies will only screw the poor who live hand to mouth and the unemployed who won't be able to find a job if dems retain power. Why? Rich people know how to survive when the gov becomes oppressive. Instead of running a business here in the states that doesn't allow them to turn a profit, they invest their capital in off shore funds that allow their money to grow legally without having to pay any taxes in the states, as long as the money never comes home to roust which it won't. Poor people on the other hand become more dependent on the gov which has less resources due to reduced business activity and the fact 1/2 of those who receive gov handouts are not even citizens of the USA. Talk about a FUBAR situation!

  3. Anyone driving a 1967 cutless...well DA !! I don't want to hear any bitching.That goes for your hummer crowd and your huge SUV gang... As for Status....well hell...California is at the front of that line. Wake up people...The days of driving 6 times across the street in your Escalade to the 7 eleven are over....Hell will freeze over before they surrender those monsters. I actually liked it back East when the gas prices went through the roof....the roads were empty of all the monster trucks and getting around was a dream.I drive a sensible car with sensible mileage and gang my stops up together so I make one trip,starting with the furthest point and working my way back home,not the other way around. Takes a little thinking,but not much.