California fuel prices set to soar as Chevron’s East Bay refinery begins maintenance work

By Lucia Kassai and Chunzi Xu | Bloomberg

Gasoline and diesel prices in the Golden State may soar to fresh records in coming weeks as one of the largest refineries on the West Coast starts maintenance.

Chevron Corp. is scheduled to carry out multi-unit maintenance at its Richmond refinery on the San Francisco Bay, which is expected to last for about a month, according to people familiar with operations. The planned work includes gasoline-making units and comes as both Phillips 66 and PBF Energy Inc. are already conducting upkeep at diesel and jet fuel-making facilities.

California gasoline pump prices at $6.435 a gallon remain far above the national average, according to auto club AAA. In Napa, the most expensive metro area in the country as of Tuesday, prices are as high as $6.63 a gallon. The national average is $5.01 a gallon.

“California is particularly vulnerable to refinery maintenance because inventories are low and the West Coast, unlike the Gulf Coast, is not connected to pipelines that can bring in supplies quickly,” said Felipe Perez, a downstream director at S&P Global Inc. based in Los Angeles. On top of that, he said, the ability of fuelmakers to boost production is somewhat limited because they are wary about operating near 100% of capacity due to environmental restrictions.