US Gasoline Prices Drop Except for the West Coast

Drivers in majority of the United States are seeing a lower gasoline price in recent weeks. But, that is not the case in the West Coast.

In Oregon, the recent average gasoline price for one gallon of regular was higher by 16 cents from the past week at $4.17. Washington State’s average is $4.20 while that of California is $4.35. Moreover, the two states had two-digit increases.

In the meantime, the national average gasoline price was $3.73 which is a drop of 5 cents.

According to analysts, gasoline shortage tied to concerns on the refineries of the region is the reason for the gasoline prices’ sharp increase in the wholesale market.

In California, supplies of gasoline are lower by more than 20% compared to the previous year. The Energy Department said that the West Coast’s stocks of gasoline have not reached this low level in the May month since 1992.

Tom Kloza said that it is a long time particularly when the number of additional vehicles in the market since that year is considered.

In the recent months, gasoline prices, sharply increased across the United States due to a crude oil price run-up. However, the crude oil price per barrel has declined to only $95 which provides a slight relief to motorists in many countries.

In order to fight pollution, the West Coast changes to a more costly fuel blend during the summer. However, market experts attribute the price increase to the unsuccessful restart of Blaine, Washington’s BP refinery and several California refineries’ maintenance work.

As the third biggest refinery on the West Coast, the BP refinery makes 20% of the gasoline needs of Washington. However, it has been closed since a fire occurred last February. The company made plans to restart in the previous week. However, that was postponed due to an unknown problem.

Alison Roberts, spokeswoman of the California Energy Commission, said that the decision to delay the restart possibly caused BP and others to purchase wholesale gasoline to meet their contractual commitment.

In the meantime, five out of the twelve refineries in California reduced their production temporarily due to a planned maintenance.

Kloza, together with other analysts anticipate the increase in gasoline prices will only be short lived as refineries go back to the usual production.

By: Chris Termeer