Refinery Fire Could Kick Gas Prices Up by 25-30 Cents a Gallon
The fire at Chevron Corp.’s Richmond oil refinery is having an immediate impact on spot prices for the state’s expensive blend of unfinished gasoline, sending them higher by as much as 30 cents a gallon over what it cost a day earlier, according to fuel price experts. A similar rise in retail prices should follow quickly, the experts said, but for how long was unclear.
About the only good news was the fact that just a few minor injuries were reported, in spite of what appeared to be an intense blaze that was visible for miles. The fire began Monday evening around 6:15 p.m. at the refinery’s No. 4 crude unit.
Chevron’s 110-year-old Richmond refinery is one of 21 in California, according to the state’s Energy Commission, but only 14 of those make CARBOB gasoline, which is the nation’s most expensive blend. Among those, the Richmond refinery is one of the most important, ranking third in production with a capacity of just under 243,000 barrels a day.
Bob van der Valk, a fuel price specialist, said the Richmond facility was particularly important for Southern California, even though it is in the Bay Area. Van der Valk said it supplies gasoline to the Los Angeles area as well as to customers in the Pacific Northwest.
“From the look of things, it’s going to be out of service for some time,” said Van der Valk, who worked as a pricing manager for Unocal before it merged with Chevron in 2005.
Tom Kloza, chief oil analyst for the Oil Price Information Service, said that the fire could not have happened at a worse time for the state’s motorists, with weeks still remaining in the busy summer driving season.
“For California, it’s a big refinery and very important to the market,” Kloza said.