MARTINEZ — Gasoline prices rose slightly in the Bay Area in the wake of an explosion and fire that knocked an East Bay refinery offline — although experts say it’s too soon to know the impact on vehicle fuel costs.
An explosion and fire at the Martinez Refining Co. plant in northern Contra Costa County has halted operations at the refinery.
Prices for unleaded gasoline rose a bit on Monday after the refinery blaze in Martinez, according to information posted on the closely watched Gas Buddy online site.
Gasoline prices were a bit higher on Monday compared with Sunday in California, the South Bay, East Bay and San Francisco metro area, this news organization’s review of the Gas Buddy info shows.
What isn’t clear, however, is the sort of impact that the Martinez refinery fire portends.
“I think there is going to be a spike in gas prices,” said Severin Borenstein, an economist and faculty director of the Energy Institute at UC Berkeley’s Haas School of Business.
The timing of the refinery fire, however, could somewhat mitigate the impact on gasoline prices — depending on how long the refinery remains out of commission.
“This is coming at a time of relatively low demand for gasoline in California,” Borenstein said.
Yet this hopeful factor must play out in an economic landscape with some forbidding characteristics
For one thing, the stricken East Bay refinery wields a significant role in California’s fuel market.
“The Martinez refinery accounts for about 10% of the refining capacity in California,” Borenstein said.
What’s more, California imposes strict requirements and regulations on the blends of gasoline that can be sold statewide.
“The restrictions and environmental regulations on California gasoline are much higher and stricter than what is required at the federal level,” said Doug Johnson, a spokesperson for Triple-A. “California has to have cleaner fuel than what is required in other states.”
The rules have effectively transformed California into a gasoline island, according to Borenstein.
“There are more environmental regulations and taxes on California gasoline elsewhere in the country,” Johnson said.
The restrictions also mean it could take longer than usual to replace any lost gasoline production while the refinery stays out of service.
“We can’t bring replacement fuel into California that quickly,” Borenstein said. “It takes about a month.”
Amid the murky prospects for fuel prices, the primary certainty was that the refinery was still not operating on Monday.
“Refinery operating units have been shut down except required utility systems,” Martinez Refining Co. stated in a post on its website.
Martinez Refinery officials also warned residents that they may continue to see indications of unusual activity at the refining plant.
“You may continue to see minimal smoke until further notice,” the refining company stated on its website. “Flaring continues with the potential for intermittent flaring throughout the week.”