LOS ANGELES ? LA drivers seeking to fill up are in for a shock: sky-high prices and, in some cases, no fuel. A supply shortage has triggered record-high wholesale fuel prices and shuttered pumps, Bloomberg News reports.
One of Chevron Corp.?s oil pipelines had to be shut down in September, while Monday?s power failure at Exxon Mobile Corp.?s Southern California refinery have slashed supplies. Wholesale gasoline in Los Angeles climbed 70 cents this week to reach $1.15 per gallon, the highest level since November 2007. Pump prices soared an average of 8.3 cents to reach $4.315 in California on Wednesday, 53.1 cents above the national average of $3.784.
Retailers all over the area are running out of gas or shutting down because they can?t afford to refill their underground tanks at the current market rate. At the Low-P gasoline station in Calabasas, Calif., the tanks are empty. ?I can get gas, but it?s going to cost me $4.90 a gallon, and I can?t sell it here for $5,? said John Ravi, owner. ?My market is open, but no gas.?
?We?re going to start shutting pumps Friday,? said Quality Auto Repair owner Sam Krikorian. ?Gas is costing me almost $4.75 a gallon with taxes. There?s no sense in staying open. The profit margins are so low it?s not worth it.?
Even Costco has run out of fuel at some locations because of low supplies. The lack of gasoline ?feels like a hurricane to me, but it?s the West Coast,? said Jeff Cole, vice president of gasoline for Coscto. ?We?re obviously extremely disheartened that we are unable to do this, and we?re pulling fuel from all corners of California to fix this.?
The California Independent Oil Marketers Association has requested that the state immediately issue a waiver letting refiners to produce and sell winter-grade fuel, which usually can be sold starting Oct. 31. ?Everybody is concerned about what might happen. ?The real question is: How long is this going to last and what can the state do?? said Jay McKeeman, association spokesman.
?This state?s complex fuel regulations and unique fuel recipe leave us very vulnerable to these situations, especially when inventories are drawn down during summer-to-winter and winter-to-summer fuel blend periods,? McKeeman told NACS Daily. ?Of great concern to us, beyond this situation, is the implementation of CARB?s Low Carbon Fuel Standard (LCFS). Situations like this may become the norm, not the exception, if the LCFS is allowed to move forward.?