Time of year, loss of refineries raise pump prices

California gas prices are high and getting higher. Time of year and refinery problems are among several factors.

The average price at the pump for regular unleaded gasoline Thursday in Modesto was $3.488 per gallon, according to the tracking website Modestogasprices.com. That’s up from $2.886 a month ago.

“We’re probably up a dollar from December,” Carl Boyett, CEO of Boyett Petroleum, said Wednesday about the market. Boyett Petroleum is a family-owned independent fuel supplier headquartered in Modesto.

California’s average prices right now are about 50 cents higher than Hawaii’s, which almost always has the highest prices in the nation, Boyett said. The average cost of gas nationwide Thursday was $2.679 a gallon, up from $2.386 a month ago, according to the AAA Daily Fuel Gauge. Within the state, said Boyett, Los Angeles’ prices now are 47 to 50 cents higher than San Francisco’s.

That said, prices at the pump nationally still remain almost a dollar lower a gallon than last year, according to an Associated Press report. Modestogasprices.com shows the Modesto average for May 14, 2014, at $4.067.

Fueling up at the Arco station at Fifth and I streets in Modesto on Thursday morning, Douglas Filwau said he’s not troubled by what he’s paying at the pump. “As long as it stays under four bucks, that’s fine with me,” he said. “I lived in Tennessee for a while and I can remember when it was close to $5 a gallon.”

Part of what’s raised California prices is the expansion at the start of this year of the state’s cap-and-trade program to include motor vehicle fuels, Boyett said. He estimates that’s added 10 to 12 cents to the price of a gallon of gas.

Time of year also plays a role, Boyett said. “The highest price of the year typically is May 5, but not always; it can be in April or June,” he said.

The reason? Refineries achieve higher production when making winter-grade gasoline, but in February or March, they switch over to making summer-grade gas, Boyett said. Summer-grade production typically runs 15 percent lower than winter grade. Refineries can’t blend the two, he said, so they “work their inventories down so that when they start to make summer grade it does not get contaminated.”

To that reduced production, add the ExxonMobil refinery in Torrance going offline after an explosion in February. The blast destroyed a piece of equipment crucial to gasoline production. Boyett said it could be at half production by the end of the year.

Motorists throughout the state also have been paying the price for brief shutdowns near the end of last month at the Chevron refinery in Richmond and the Tesoro refinery in Martinez.

“There are 12 refineries in the state,” Boyett said. “For simplicity, let’s say each makes about 10 percent of California’s gas, so losing any one of them has a big impact. And no one else in the country makes California gas, so you can’t just bring it in.”

Bottom line, he said, is that there are multiple contributors “and they all add up.”

This story was originally published May 13, 2015 at 1:19 PM with the headline "Time of year, loss of refineries raise pump prices."