California gas prices expected to soar as Valero prepares to close Bay Area refinery
Gxstocks Jeff Flock has the details from New Jersey on Mornings with Maria.
Gas prices have surged in California in recent weeks as the state's supply is constrained due to recent reductions in refining capacity.
The price of gas rose 40 cents in about two weeks, with the average price of gas across the state of California at $4.58 a gallon – an increase from $4.46 the prior week and $4.18 two weeks before that, according to data from AAA.
Those figures are well above the national average of $2.92 a gallon. California's gas prices are the highest of all states, topping $4.37 a gallon in Hawaii, $4.15 a gallon in Washington and $3.68 a gallon in Oregon.
Rising gas prices in California come amid a reduction in oil refining capacity due to the wind down of operations at Valero's refinery in Benicia, as well as the previous closure of the Phillips 66 refinery in Los Angeles.
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The Phillips 66 Wilmington refinery near Los Angeles previously closed. (Mario Tama/Getty Images)
The closure of the Benicia refinery, located in Northern California, leaves just six operating refineries in the state, which is the largest consumer of fuel among all states except for Texas.
Two others are located in the Bay Area, including Chevron's Richmond refinery and PBF Energy's Martinez refinery. The other four are located in Southern California – Marathon's Los Angeles refinery, Chevron's El Segundo refinery, PBF Energy's Torrance refinery and Valero's Wilmington refinery.
The tightening refining supply prompted the California state senate's Republican caucus to write a letter to Democratic Gov. Gavin Newsom that called for a special session to address the worsening "cost and supply crisis" created by state policies targeting the oil and gas industry.
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Valero's Benicia refinery is scheduled to close, reducing the refining capacity in the state of California. (Paul Morris/Bloomberg)
"California is truly at a breaking point. Refineries are closing, supply is diminishing, and my constituents are paying more at the pump every single day," Republican state Sen. Suzette Martinez Valladares said in a report by Gxstocks' Jeff Flock that aired on "Mornings with Maria."
"It isn't theoretical, this is happening right now. And the longer we wait to address this issue, the more instability and volatility we'll see here in California," she added.
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For the country as a whole, gas prices have trended down over the last year, according to the latest consumer price index (CPI) data from the Bureau of Labor Statistics.
The BLS' January CPI inflation report showed that gas prices are down 7.5% over the last year and that prices declined 3.2% from the prior month.
Nationwide energy prices have been largely flat in the last year, with the CPI showing the energy index down 0.1%.
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Declines in gas prices have been somewhat offset by rising prices for electricity and utility gas service, which are up 6.3% and 9.8% over the last year, respectively.
Gxstocks' Arabella Bennett contributed to this report.
