California refinery outage raises fears of gas price hike
TORRANCE — Southern California Edison was investigating Tuesday the cause of a widespread power outage that forced the shutdown of a major Los Angeles County refinery and raised concerns that gasoline prices in the region may temporarily go up.
The utility said more than 57,000 customers lost power before dawn Monday in Gardena, Hawthorne, Inglewood and parts of Los Angeles and Torrance.
The Los Angeles Times reported that the outage was enough to cut production temporarily at the Torrance refinery, which PBF Energy bought from Exxon Mobil in July. It will take "multiple days" to return the plant to full service, said Jeffrey Dill, president of PBF Energy Western Region.
An explosion at the refinery in February 2015 caused it to operate at less than 20 percent capacity for months during repairs. That lengthy process sent gasoline prices in Southern California to as much as $1.50 above the rest of the nation, more than twice the usual gap, the Times said.
Torrance produces 10 percent of the state's refined capacity and 20 percent of Southern California's.
Bob van der Valk, an independent fuels price specialist, said the outage Monday caused an immediate 10 cent increase in spot market prices in Southern California, which could lead to a temporary increase in retail prices.
Gas prices this week were up just a penny more than last week, but that might change quickly, said Marie Montgomery, a spokeswoman for the Automobile Club of Southern California.
"This is one of those things that probably tends to set the market off more than is warranted," Montgomery told the newspaper. "Hopefully, it will be a short-lived effect."
Gas prices overall are expected to decline over coming weeks as refiners change to the winter blend of gasoline by Nov. 1. Winter blend gas does not carry the same environmental requirements as California's summer blend.