LOS ANGELES (Reuters) - Gasoline prices in California hit record levels on Saturday, after an unprecedented surge in pump prices propelled by a perfect storm of factors that drove inventories in the region down to near-historic lows.
The average cost of a gallon of gas in the state stood at $4.614, edging past the previous record of $4.61 set in 2008, according to figures from AAA.
But prices topped $5 a gallon in some locations. On Saturday, a local NBC station showed one downtown Los Angeles gas station selling regular grade at $5.49 a gallon.
Average prices in the Golden State were $4.145 a week ago, AAA data show.
The abrupt price spike has shocked California’s car-loving residents, and left some retailers in Los Angeles scrambling for supplies. Signs have emerged that the run-up in prices could soon end, but motorists may think twice about hitting the road for now.
“I think $5 is kind of hitting the limit,” driver Genoush Tunian told the local CBS station in Los Angeles.
A series of events have conspired to limit supplies, causing gas inventories in the West Coast region to fall this week to their third-lowest level in 20 years on a seasonal basis, government data shows.
A fire closed Chevron Corp’s Richmond, California, refinery during the summer. A Chevron pipeline that carries crude oil from the state’s Central Valley to refineries in the San Francisco Bay area has also been closed since mid-September.
More recently, Phillips 66 shut two plants to conduct planned maintenance, while a power outage hit Exxon Mobil Corp’s refinery in the Los Angeles-area city of Torrance on Monday, disrupting operations for days.
On Friday, Exxon said the Torrance plant had resumed operations, which helped ease supply fears.
In another complication, California refineries had already cut production in anticipation of switching over to a seasonal winter blend of gasoline next month. Gas stations in California are set on November 1 to begin selling winter-blend gas, which releases more smog-causing substances than summer blend.
State officials earlier this week reassured the public that California was not running out of gasoline.
Costco had been forced to shut about 14 of its 40 Los Angeles-area stations, but the company’s chief financial officer, Richard Galanti, said later the “situation is starting to improve.”
Jeffrey Spring, a spokesman for the Automobile Club of Southern California, which is affiliated with AAA, said it remained unclear how prices may change in the coming days.
“A lot depends on whether the perceived supply issues are quickly addressed,” he said.
On Thursday, the California Independent Oil Marketers Association, which represents wholesale and retail gasoline marketers, asked the California Air Resources Board, an air quality regulator, to allow the early sale of winter-blend gasoline.
CARB could also permit gasoline from neighboring states that does not meet California’s strict emission standards. A CARB spokesman said the board is evaluating the emergency request, but said there is no timetable for a decision. (Reporting By Alex Dobuzinskis; Additional reporting by Nichola Groom; Editing by Eric Walsh)