Tags: california | gasoline | refine | price

California Gasoline Falls From High as Refiners Switch

Wednesday, 10 Oct 2012 03:41 PM

Gasoline at the pump in California fell from a record as refiners including Valero Energy Corp. and Phillips 66 began making a cheaper blend of fuel after receiving permission from the state.

Regular gasoline at the pump slid to $4.666 a gallon Wednesday from the all-time peak of $4.671 Oct. 9, according to data from AAA, the nation’s largest motoring organization. Prices jumped 50 cents last week as refineries reduced output and Chevron Corp. shut a pipeline because of contamination.

Phillips 66 is producing gasoline with a higher vapor pressure at its California refineries, Rich Johnson, a Houston- based company spokesman, said Wednesday in an e-mail. Valero is also making the cheaper blend at its two plants in the state, Bill Day, a San Antonio-based spokesman for the company, said Tuesday by e-mail.

The California Air Resources Board granted refineries permission on Oct. 7 to make gasoline with a higher vapor pressure, allowing them to produce more of the fuel by adding butane to the mix.

“You can add more light gasoline blendstocks” and increase output by 2 percent to 5 percent under the rules, said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

The recent price spike in California was the largest weekly increase in any state since Hurricane Ike drove up Georgia prices in 2008 and the highest weekly increase for California on record, according to Michael Green, a spokesman for AAA.

Wholesale Prices

Wholesale gasoline prices rose Tuesday for the first time in three days as Exxon Mobil Corp.’s refinery in Torrance announced plans to flare gases through the end of the month.

Prices for California-blend gasoline, or Carbob, on the spot market, climbed 28.06 cents to $3.5237 a gallon in Los Angeles, data compiled by Bloomberg show. The same 85.5-octane blend gained 28.06 cents to $3.4437 in San Francisco.

Exxon’s plan to flare gases at its 150,000-barrel-a-day refinery near Los Angeles through Oct. 31 isn’t related to a breakdown, the company said in a notice to regulators. No impact to production is anticipated, Gesuina Paras, a Torrance-based spokeswoman for the refinery, said by e-mail.

That plant resumed normal operations Oct. 5 after an Oct. 1 power failure that reduced output and spurred the run-up in gasoline prices.

The power failure followed the shutdown of a Chevron pipeline that delivers crude to Northern California because of contamination. Fuel supplies were already restricted after an Aug. 6 fire that knocked out a crude-processing unit at Chevron’s plant in Richmond, near San Francisco, the third- largest in the state. It has been making transportation fuels at a reduced rate since the incident, the company said.

The Richmond crude unit won’t resume production before the end of the year, Chevron said in a third-quarter interim update late Tuesday.

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Gasoline at the pump in California fell from a record as refiners including Valero Energy and Phillips 66 began making a cheaper blend of fuel after receiving permission from the state.
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Wednesday, 10 Oct 2012 03:41 PM
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