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Sunday, Oct. 07, 2012

Governor orders early sales of winter-blend fuel to ease gas prices

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California motorists faced another day of record-breaking gasoline prices Sunday, though relief may be on the way.

AAA reported Sunday that the statewide average price for a gallon of regular unleaded gasoline was $4.66, the highest in the nation, with the Golden State overtaking Hawaii as the state with the most expensive fuel because of a temporary reduction in supply.

In some locations in California, fuming motorists paid $5 or more per gallon while station owners had to shut down pumps in others.

Gov. Jerry Brown ordered state smog regulators Sunday to allow winter-blend gasoline to be sold in California earlier than usual to help drive prices down.

Winter-blend gas typically isn't sold until after Oct. 31. Few refineries outside the state are making summer-blend gas, putting pressure on California manufacturers.

Brown's action was good news for some.

At the Arco station at I and Fifth streets in Modesto, Michelle Wells said she would welcome even a small dip in the price after paying $60 to fill up her car.

"And I drive a little car," she said. "That's a lot for a four-cylinder, little car."

At the counter inside the station, Daniel Showen said the station's prices have gone up 60 cents in three days. Co-worker Laura Yarbrough said she was glad the state was moving to lower gas prices.

"They are upset," she said about customers.

$4.50 average in Modesto

AAA's Daily Fuel Gauge reported Sunday's average price for a gallon of regular unleaded gas in Modesto was $4.50, up from $4.05 a week ago and $3.73 a year ago. But Sunday's price did not break the record of $4.56 set June 18, 2008.

Sunday's average price for a gallon of regular unleaded gas was $4.59 in Merced and $4.55 in Stockton-Lodi, according to AAA's Daily Fuel Gauge Web site.

Brown's action follows a request by the California Independent Oil Marketers Association for permission to produce winter-blend fuel before the state's typical Oct. 31 switchover date. The request is subject to review by the California Energy Commission.

It is unclear what effect an early switchover might have. Fuel prices started spiking last week, after a series of in-state refinery problems. Some analysts predicted prices could start falling this week.

Brown's office said an early switch to winter-blend fuel could increase California's fuel supply by 8 percent to 10 percent, with minimal impact on the environment.

"In light of the tight gasoline supplies and resulting price spikes, we should not wait until the end of the month to start production of our winter-blend gasoline," Brown said in a letter to the California Air Resources Board.

"Allowing refiners to make an early transition to winter-blend gasoline could quickly increase fuel supply and provide a much needed safety valve with negligible air quality impacts."

Gas prices have risen across the country, but Californians have been hit harder because of refinery and pipeline problems that have left the state with its lowest gasoline inventory in a dec- ade.

The Sacramento Bee, The Associated Press and Modesto Bee staff writer Nan Austin contributed to this report.