Fuel shortage shuts California pumps

Independent gasoline station owners in the Los Angeles area are beginning to shut their pumps because of supply shortages that have driven wholesale fuel prices to record highs.

Low-P, a gasoline station in Calabasas, Calif., about 50 kilometres west of Los Angeles, stopped selling unleaded gasoline Tuesday and ran out of high-octane and mediumoctane fuel Wednesday, John Ravi, the station’s owner, said.

Ravi posted an “Out of Gasoline” sign on each pump and took down the prices outside his shop, he said.

“I can get gas, but it’s going to cost me $4.90 a gallon, and I can’t sell it here for $5,” Ravi said.

Spot, or wholesale, gasoline in Los Angeles has surged 70 cents this week to a premium of $1.15 a gallon versus gasoline futures traded on the New York Mercantile Exchange, data compiled by Bloomberg show.

That’s the highest level for the fuel since at least November 2007, when Bloomberg began publishing prices there. On an outright basis, the fuel jumped to $3.95 a gallon.

A Chevron Corp. oil pipeline shut down last month, an Oct. 1 power failure at ExxonMobil Corp.’s Torrance refinery and units down at other plants have cut supplies in the market.

“We’re going to start shutting pumps Friday,” Sam Krikorian, owner of Quality Auto Repair in North Hollywood, said by phone. “Gas is costing me almost $4.75 a gallon with taxes. There’s no sense in staying open. The profit margins are so low it’s not worth it.”

Exxon’s 150,000-barrela-day Torrance oil refinery may flare gases for a week as it restores production following a power failure that shut some units and slowed output from others, the company said.

Chevron’s Kettleman-Los Medanos pipeline, which carries crude to northern California refineries operated by Royal Dutch Shell PLC, Tesoro Corp. and Valero Energy Corp., remained shut after elevated levels of organic chloride were detected in the oil.