Chevron fire sparks questions, gas fears

(S.F. Examiner file photo)

(S.F. Examiner file photo)

Motorists should brace for significantly higher prices at the pump in the coming weeks as a result of Monday night’s fire at the Chevron oil refinery in Richmond.

Wholesale prices for fuel have already risen by 23 to 35 cents a gallon, a cost increase that will soon be passed on to consumers, said Cynthia Harris, a spokeswoman for AAA. She said it is too early to speculate about how much gas prices will increase, but the spike will be “significant.”

“Anytime there is a fire at a refinery, speculators get concerned that there won’t be enough gas,” Harris said. “Right now, that speculation is driving up the prices, and local consumers will definitely feel the impact.”

Andrew Lipow, president of consultants Lipow Oil Associates, said he expects gas prices to increase 10 to 15 cents in the Bay Area as a result of lost production. The costs could rise as soon as Monday, Lipow said.

The Chevron refinery in Richmond is a key fuel producer in California, capable of satisfying about 13 percent of all gas demand in the state, Lipow said. Replacing its lost production will not be easy, he said.

“A lot of this depends on how quickly Chevron returns to its full operations at the Richmond refinery,” Lipow said. “But I think it’s safe to assume that prices will remain high for at least several weeks.”

Chevron spokesman Sam Singer said the company has yet to establish a timetable for when the Richmond refinery will return to its normal production levels.

“At the moment, Chevron and county and state regulators are going through the data to determine what caused the fire,” Singer said. “There are still a series of steps that have to be taken before regular production resumes.”

Regular unleaded gasoline cost an average of $3.93 a gallon in San Francisco on Tuesday, up 1 cent from Monday, according to the AAA. Local fuel prices have already risen by 6 cents in the past month.

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