Valero Halts Gas Sales in California

SAN ANTONIO -- Gasoline woes continue in California as the largest refiner in the United States stopped sales as prices at the pump continue to climb.

On Thursday Valero Energy Corp. temporarily stopped selling gasoline in California's wholesale market as a string of refinery outages resulted in a regional gasoline shortage.

The lack of gasoline has pushed California's wholesale, or spot, prices of $4.10 a gallon Thursday, a 39-percent increase from Aug. 6, the day an explosion shut down Chevron Corp.'s 245,000 barrel-a-day refinery in Richmond, Calif. Those prices don't include taxes, transportation and other fees, which typically add another 70 cents or more before the gas reaches the pump, according to Market Watch.

Valero said it will meet its current contracts to supply gasoline, but won't sell into the spot market. Company spokesman Bill Day told the news outlet resumption of spot sales "will depend on markets and inventories." The company also will continue to supply gasoline to its branded and licensed retail stations in the state, Day added.

As CSNews Online previously reported, gas station owners in the greater Los Angeles area have begun to shut down fuel pumps as wholesale fuel prices reached record levels.

Two months after the fire, Chevron's Richmond facility is only operating at reduced rates. Supplies have been further limited by a weeklong shutdown of a refining unit in late September at Exxon Mobil Corp.'s 149,500 barrel-a-day refinery in Torrance, Calif.

In addition, Phillips 66 said yesterday its 120,000 barrel-a-day refinery in San Francisco was going to reduce production for an unspecified amount of time due to planned maintenance, according to the report.

All the supply issues have led to dramatic swings in gas prices. Gas stations in the Los Angeles area were selling gasoline Thursday afternoon for $4.45 a gallon, on average, up 11 cents from the start of the day at midnight, according to

In San Francisco, motorists were seeing $4.57 a gallon, on average, up more than 12 cents a gallon, or 2.8 percent since midnight, according to the online site.

"This is a serious problem," Richard Hastings, macroeconomy strategist at Global Hunter Securities, told Market Watch. "Five dollars a gallon is a plausible concept at this point, and it won't be $5 at the airport filling station -- it will be all over the place."


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