BROWN URGES "WINTER-BLEND" GAS PRODUCTION: State Tries to Lower Record High Gas Prices
Californians are paying record-high gasoline prices. Motorists in Humboldt and Del Norte are shelling out an average of more than $4.75 a gallon today, but Governor Jerry Brown has taken action to combat the surge in fuel prices-being blamed in large part on an oil refinery fire in the bay area in August and a power outage at a southern California refinery last week. Those incidents limited supply and in turn drove up prices. The governor last night ordered state regulators and refineries “do whatever is necessary” to ramp up production of winter-grade gas blend three weeks earlier than usual. Fuel experts say winter-grade gas is easier and cheaper to make than summer-grade gas and that supplies could increase within a week or so. Gasoline analysts say wholesale prices are already dropping and that retail prices may have already neared their peak. "We’ve seen immediate price reaction because the market knows the refiners can produce more gasoline,” said Gordon Schremp, Senior Fuels Analyst for the California Energy Commission. “Now we expect wholesale prices at the distribution terminals to fall and retail prices are almost at their peak. Between yesterday and early this morning they only increased by nine-tenths of a penny, less than one cent. So we believe we’re almost at the peak of four dollars and sixty-six cents a gallon.” Experts say the summer blend is partially to blame for California having the nation’s second-highest prices after Hawaii. Also to blame? High gas taxes and the limited number of both pipelines and refineries here. That likely won’t change soon because of already-low profit margins in the refinery business and the stringent regulations.