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Refinery problems lead to surging prices at the gas pump

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Posted at 8:09 AM, Apr 12, 2019
and last updated 2019-04-12 11:09:14-04

SAN DIEGO, Calif (KGTV) - A series of problems at a handful of California gas refineries have caused prices to surge over the last month.

According to the Automobile Club of Southern California, the average cost of gas in California is $3.955 per gallon. That's more than a dollar more than the national average of $2.811. Alabama has the lowest gas prices in the country at $2.499 per gallon.

Because of strict environmental regulations, most of the gas in California has to be made in state. So when local refineries go off-line, it directly impacts prices.

AAA says at least 6 of the 12 gas producing plants in the state have had problems in the last month, leading to shut-downs.

On March 15, a fire shut down the Wilmington Phillips 66 refinery.

Ten days later, the Valero refinery in the Bay Area shut down when a scrubber malfunctioned, sending black smoke into the air.

Flaring issues caused outages at two plans in Southern California, the Chevron plant in El Segundo and the Valero in Wilmington.

Meanwhile, PBF Energy in Torrance had routine maintenance scheduled, which decreased production.

"We don't have pipelines that can pipe relatively cheap gasoline to use from other states," says Marie Montgomery with the Automobile Club of Southern California. "We have to rely on shipping of gasoline when our refineries have problems."

According to the California Energy Commission, refineries in Washington and the US Gulf Coast can produce gas for California, as can refineries in Eastern Canada, Finland, Germany, the US Virgin Islands, the Middle East and Asia. But it takes time for those shipments to arrive.

In the first week of April, the state didn't receive a single drop of imported gasoline.

As we wait, local refineries have dipped into their reserves to meet demand, taking two million barrels out of reserves.

"The imported gas is going to be coming here, there's no doubt about that," says Montgomery. "We've got the highest prices in the country by far right now. So it's very profitable for other countries to send it to us."

Still, AAA says it's almost a sure thing that prices will top $4 per gallon by the end of the month.

To find the best price on gasoline in your area, click here.