Gas Prices

Motorists pump gas at a Mobil gas station after being greeted with a 25-cents-a-gallon price increase in Torrance. February 26, 2015. (Thomas R. Cordova / Staff Photographer)

By Nick Green, Daily Breeze
Posted: 02/26/15, 12:01 AM PST | Updated: 59 secs ago

The explosion at the ExxonMobil refinery is only partly to blame for a surge in gasoline prices that even stunned one gas station operator Thursday.

Frank Scotto, Torrance’s former mayor, said he was forced to pass along a 24-cent overnight increase in pump prices at his Chevron and Mobil stations. Scotto said it was the largest one-day increase he had seen since he began tracking pump prices in 1967.

The average pump price in Los Angeles has risen 75 cents over the past month, according to GasBuddy.com, although Scotto said his prices have jumped $1.24 since Jan. 20. The average price of gas in Los Angeles County jumped 9.9 cents overnight, according to GasBuddy.com

“I’ve been doing this a long time and the whole thing is a shock to me,” Scotto said. “I’m very disappointed the price has changed so dramatically. I don’t think there’s enough evidence that should happen.”

Industry officials beg to differ, noting that a confluence of events have contributed to the rapid rise in prices from what were some of the lowest prices in years recently. Indeed, Los Angeles gas prices remain about 57 cents a gallon below last year’s average price.

While the nation’s crude oil inventory continues to rise, it is refining capacity in California that’s crimping supplies.

The annual change from winter fuel blends to more expensive summer blends that must be completed by mid-April for air quality reasons bears part of the blame, said spokesman Tupper Hull of the Western States Petroleum Association.

That change also prompts some of the 14 refineries in the state to schedule extensive maintenance, further reducing supplies.

Two of those plants, including the ExxonMobil Torrance Refinery, are not producing refined gasoline at all. A major explosion hit the Torrance refinery Feb. 18, shutting down gasoline production indefinitely.

Add in the fact that price volatility is accentuated here because California is geographically isolated from the rest of the nation and additional crude oil supplies must be brought in by ship rather than via pipelines, Hull said.

“When (fuel wholesalers) are concerned or anxious about supplies tomorrow they tend to bid up the cost of available supplies today,” he said. “So it’s entirely possible what we’re seeing today is a delayed reaction to events at some point in the past.

“It’s like a baker,” Hull added. “A baker needs to charge for his bread today in order to have the money necessary to buy flour tomorrow. And if he thinks the price of flour is going up tomorrow he needs to charge more for today’s bread. And that’s true in fuels, too.”

Still, pump prices have escalated at a rate that even industry professionals underestimated.

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