- Associated Press - Sunday, October 7, 2012

LOS ANGELES — California motorists faced another day of record-breaking gasoline prices Sunday, though relief appeared to be on the way.

In its latest update early Sunday, AAA reported that the statewide average price for a gallon of regular unleaded gasoline was $4.655. Saturday’s average of $4.6140 was the highest since June 19, 2008, when it was $4.6096.

The four-penny-per-gallon jump Sunday was less than Saturday’s increase, which was 12 cents.

Sunday’s price, like Saturday’s, was the highest in the nation, with the Golden State overtaking Hawaii as the state with the most expensive fuel due to a temporary reduction in supply.

Gov. Jerry Brown ordered state smog regulators Sunday to allow winter-blend gasoline to be sold in California earlier than usual to help drive prices down. Winter-blend gas typically isn’t sold until after Oct. 31. Few refineries outside the state are currently making summer-blend gas, putting the pressure on already-taxed California manufacturers.

In some locations, fuming motorists paid $5 or more per gallon while station owners had to shut down pumps in others.

A station in Long Beach had California’s priciest gas at $6.65 for a gallon of regular, according to GasBuddy.com. Meanwhile, customers at an outlet in San Pablo paid just $3.49, the lowest price in the state.

The average for a gallon of regular was $4.69 in Los Angeles, $4.71 in San Diego and San Francisco, $4.55 in Sacramento and $4.90 in Santa Barbara, according to GasBuddy.com.

“I seriously thought it was a mistake on the sign when we pulled in,” said Nancy Garcia, 34, while filling her Honda Accord at a Chevron station in the Los Angeles neighborhood of Highland Park. She paid $4.65 a gallon for regular grade and said she couldn’t afford to fill her tank all the way.

AAA’s Daily Fuel Gauge report said the national average both Saturday and Sunday was about $3.81 a gallon, the highest ever for this time of year. However, gas prices in many other states have started decreasing, which is typical for October.

The dramatic surge in California came after a power outage Monday at a Southern California refinery that reduced supply in an already fragile and volatile market, analysts said. The refinery came back online Friday and prices were expected to stabilize in the coming days.

Patrick DeHaan, senior petroleum analyst at GasBuddy.com, predicted the average price could peak as high as $4.85 before coming back down.

“There is some relief in sight but probably not for a couple of days. Early next week is when we may see some more significant declines but at retail prices, prices may climb for the next two to three days before they start to come down,” he said.

When supplies drop, wholesale prices rise. Then distributors and station owners have to pay more to fill up their station’s tanks. They then raise their prices based on how much they paid for their current inventory, how much they think they will have to pay for their next shipment, and, how much their competitors are charging.

A web of refinery and transmission problems is to blame, analysts said. The situation is compounded by a California pollution law that Mr. Brown waived, which requires a special blend of cleaner-burning gasoline from April to October, said Denton Cinquegrana, executive editor of the Oil Price Information Service, which helps AAA compile its price survey.

Story Continues →