Gasoline prices, now averaging $3.87 a gallon in California, $3.72 in Washington and $3.69 in Oregon, are expected to spike to $4.15 to $4.25 a gallon over the next week to 10 days following Monday's partial shutdown of a Chevron refinery in Richmond, Calif.
Nationally, gasoline prices have climbed 27 cents a gallon in the past month. While the refinery fire will drive prices along the West Coast, it will also lift the national average above year-ago levels.
"August looks like a very touch-and-go month for the entire country," says OPIS analyst Tom Kloza, who expects price relief after Labor Day. For the year to date, gasoline has averaged $3.61 a gallon - 10 cents more than the average for all 2011, the most expensive year ever, he says.
Patrick DeHaan, senior oil analyst for gasbuddy.com, expects California, Oregon and western Washington state to experience price spikes like the ones that hit major parts of the Midwest in June, when an Illinois refinery shut down and three others in the state cut production.
"The West Coast is on the launch pad waiting for takeoff," DeHaan says. "We're talking over $4 a gallon, easily. It's not going to be good for motorists."
Prices in Illinois, Indiana, Michigan, Wisconsin and Minnesota remain as much as 39 cents a gallon higher than the national average of $3.65 a gallon, according to the Oil Price Information Service. "The infection is going to spread from the Midwest to the West Coast," DeHaan says.
Wholesale prices in San Francisco and Los Angeles have already spiked more than 30 cents a gallon, some of the biggest one-day jumps ever. Those prices have passed through at the pump and are expected to continue pushing prices up through mid-August.
The Richmond refinery supplies about 140,000 barrels of gasoline a day, about 15% of northern California's daily consumption, Kloza says. Regional inventories were already low compared with the rest of the nation, he says.
The five-hour refinery fire caused billowing smoke for miles. Doctors Medical Center in nearby San Pablo said more than 300 people sought help, complaining of eye irritation and breathing problems. And Kaiser Permanente's Richmond Medical Center said it treated more than 350 people with respiratory concerns.
Carol Bluitt, who lives blocks from the refinery, says she was traumatized by the blaze. "You could clearly tell there was something toxic in the air," she says. "My eyes were really, really red and running."