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RICHMOND, Calif. » A major fire at one of the country’s biggest oil refineries that sent hundreds of people to hospitals with complaints of breathing problems will push gas prices above $4 a gallon on the West Coast, analysts said Tuesday.
The fire, which sent plumes of black smoke over the San Francisco Bay Area, erupted Monday evening in the massive Chevron refinery about 10 miles northeast of San Francisco. It was out early Tuesday.
The West Coast is particularly vulnerable to spikes in gasoline prices because it’s not well connected to the refineries along the Gulf Coast, where most of the country’s refining capacity is located, analysts say.
(The fire isn’t expected to have a significant impact on pump prices in Hawaii, where refineries operated by Chevron and Tesoro produce most of the gasoline consumed in the state.)
"I really don’t expect to see any really large impact unless the shortage on the West Coast continues for some time," said Tim Hamilton, an oil industry analyst based in Washington state.
There is a possibility that Chevron eventually will decide to take some of the gas produced at its Campbell Industrial Park refinery and ship it to California, which would create a shortage in Hawaii, he added. "But that is something that would happen down the road. It’s too early to tell at this point."
Hawaii has the highest average price for regular gasoline in the nation at $4.14, according to data Tuesday from AAA, Oil Price Information Service and Wright Express. The only other state above $4 is Illinois at $4.06. The national average was $3.63.
The California Chevron refinery is particularly big and important to the West Coast market, said Tom Kloza, chief oil analyst at OPIS.
It produces about 150,000 barrels of gasoline a day — 16 percent of the region’s daily gasoline consumption of 963,000 barrels, he said.
California’s average price Tuesday was $3.86. But with inventories in the region already low compared with the rest of the U.S., pump prices along the West Coast will soon average more than $4 a gallon, Kloza said.
Chevron spokesman Lloyd Avram said he did not have an update on when the refinery could be restarted, and declined to comment on what kind of impact the shutdown might have on the gasoline market.
"Spot prices have already increased by as much as 30 cents per gallon in some West Coast markets, and that’s before the refinery damage has been fully assessed," said analyst Patrick DeHaan of the website GasBuddy.com.
The fire began around 6:15 p.m. Monday in the refinery’s No. 4 Crude Unit, about two hours after a vapor leak of hydrocarbons similar to diesel, said Heather Kulp, a Chevron spokeswoman.
"At approximately 6:30 p.m. the volume increased, and personnel evacuated the area," she said. "The hydrocarbon vapor then ignited and a fire occurred."
Kulp said there were no explosions, and staff at the refinery initiated an emergency response immediately after the fire started. The cause is under investigation.
The smoke and flames could be seen miles away from the refinery, which has long faced complaints and lawsuits by people who live nearby in Richmond, a mostly low-income area with five major oil refineries.
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The Associated Press and Star-Advertiser reporter Alan Yonan Jr. contributed to this story.
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