What the Heck is Up With These Gas Prices?

'Up' being the operative word. What's behind the steep overnight price hikes?

If you're like me, when you drove past the first gas station on your route Thursday morning, you blinked and rubbed your eyes, thinking, "I must be hallucinating."

Unfortunately, we weren't - gas prices really did go up an average of 20 cents per gallon from Wednesday night to Thursday morning. Since Thursday, prices are now up nearly 50 cents per gallon, and are teetering dangerously on the edge of $5 a gallon.

So, what's behind it?

After watching CNN religiously over the past few days and doing hours of online research, trying to find some sort of explanation, I've come across two possible explanations.

1) The quietest oil refinery fire in history - It's astounding to me how little news coverage an oil refinery fire in Baytown, Texas (east of Houston) that took place last Wednesday, Oct. 3 is receiving. The refinery - one of Exxon Mobil's - is reportedly one of the largest in the world, and certainly the nation, pumping out more than 500,000 barrels of oil per day. It took firefighters three-and-a-half hours to extinguish the blaze. 

Reuters reports that, between "Middle East tensions" and the Texas refinery fire, gas prices and oil futures jumped 4 percent overnight. (But, come on - when are there NOT "Middle East tensions?")

2) California and it's 'special blends' - As my East Coast-raised husband likes to say, gas prices are nuts around here because of California "and all it's silly special blends." According to reports by CNN, many gas stations across the state are actually running out of gasoline, as California works to switch production over to its mandatory-by-law "winter blend," which isn't normally made until after October 31.

CNN reporter Paul Vercammen said Friday, "If refineries could convert to winter grade fuel sooner - which costs a lot less to produce than the environmentally friendly summer-grade fuel - the prices could be a lot cheaper. But a waiver from the Air Quality Control Board is required. Until then, it's tough times here in California."

Yesterday, Sunday, October 7, Governor Jerry Brown sent a letter to Mary Nichols, Chairwoman of the California Air Resources Board, directing  the board “to immediately take whatever steps are necessary to allow for an early transition to winter-blend gasoline to be manufactured, imported, distributed, and sold in California."

In the letter released at noon on Sunday the governor says, “Due to the composition of the gasoline, refiners can produce more of the winter-blend than the summer blend.”

Other disruptions adding to a gasoline shortage include a refinery in Torrance, CA that lost power, two refineries in the state that have partially shut down for planned maintenance, and a pipeline that brings Central Valley crude to Bay Area refineries that is shut down right now, according to MercuryNews.com.

Further complicating the issue is the Chevron Richmond Refinery that still isn’t back to full production after an explosion and fire in August.  A release that accompanied Governor Brown’s letter estimated the move to winter-blend gasoline will result in an 8-10 percent increase in the gasoline supply.

Patch can help you find the best gas prices in town!

Have you checked out Burlingame-Hillsborough Patch's Commute Guide? Get the latest traffic updates for your commute, find alternate routes when there's a backup, and find out which gas stations in town have the cheapest gas on any given day.

As of Monday, it appears the cheapest gas in Millbrae is at Rob Bakers Olympian at 1009 El Camino Real, where a gallon of regular gas is going fof $4.60.


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